THE CHAPEL, APPELLANT, v. TESTA, TAX COMMR., APPELLEE.
No. 2010-0562
Supreme Court of Ohio
Submitted February 2, 2011—Decided February 10, 2011
129 Ohio St.3d 21, 2011-Ohio-545
Per Curiam.
{¶ 1} This is an appeal from a decision of the Board of Tax Appeals (BTA) in a real-property-tax-exemption case. Appellant, The Chapel, is a nonprofit corporation organized in 1953 that operates two churches: the older church at 35 Fir Hill Avenue in Akron and a newer one in the city of Green, south of Akron, built on property that was acquired in 2000 and 2001. The latter church and its surrounding acreage are the subject of The Chapel‘s exemption application, which relied partly on the house-of-public-worship exemption at
{¶ 2} Specifically at issue in The Chapel‘s appeal to this court is land improved for and devoted to recreational activities in which the general public participates. The BTA affirmed the commissioner‘s denial of exemption for this land based on its finding that the use of the land was ancillary to the public worship performed on the parcel that the commissioner held exempt pursuant to
Facts
{¶ 3} Founded in 1934, The Chapel established itself as a nonprofit corporation in 1953 and holds certification as a tax-exempt entity pursuant to
{¶ 4} The Chapel then built a large church building with classrooms on part of the property in 2001. The original site plan prepared in 2000 indicates areas to be devoted to recreation, which currently include two softball diamonds, a soccer field, and a jogging path that follows the circumference of the property. The playing fields were developed some time after construction of the church building. The jogging path was available for use in the fall or late summer of 2005. The recreational facilities were generally usable as of 2006. Although one area is intended to be developed into a ball field, it had not been developed as of the July 9, 2008 hearing before the BTA, because The Chapel was waiting for the settling of newly graded ground.
{¶ 5} The Chapel views itself as conducting a sports ministry in connection with the recreational portions of the property and holds 14 events, including church-sponsored soccer teams and flag football games. Most of the participants in those events are community members who are not congregants of The Chapel.
{¶ 6} The city of Green also has sports leagues that use the property. FedEx and Chick-Fil-A conduct company events on the fields. During the summer months, the church stages a day camp called Straight Street for children age six through eighth grade with several hundred participants. The jogging path is used by the general public without restriction. An estimated 3,000 people participated in activities on the recreational property (including use of the jogging path) in 2008, most of whom were not congregants of The Chapel.
{¶ 7} The Chapel had paid all costs to develop and maintain the property but did not charge the public to use the recreational facilities. In the church‘s softball league a $25 registration fee is required for uniforms and umpire fees. The property does not generate income for the church. The mayor of the city of Green testified that the city itself benefited because the church developed and made the property available for public use, thereby providing public recreational facilities that the city would otherwise have to pay for itself.
Analysis
{¶ 9} When a BTA decision is appealed, this court looks to see if that decision was reasonable and lawful.
{¶ 10} In the present case, the commissioner found that the primary use of the recreational property was by the public, not by The Chapel itself. The BTA did not disturb that factual finding, and it is supported by the record. We must therefore determine whether the property is exempt under
Under
{¶ 11} Under
{¶ 12} It is undisputed that The Chapel qualifies as an institution for purposes of
{¶ 13} We have held that making property accessible to institution members and to the general public for recreational purposes without charge is a charitable use of property. Highland Park Owners at 407. According to the commissioner‘s final determination in this case, the evidence shows that the primary users of the recreation fields are outside parties, including independent sports leagues, baseball clinics, cycling clubs and youth sports programs conducted through the City of Green. Additionally, the applicant allows the public to use its walking and jogging trails. This factual finding describes a charitable use of property under Highland Park Owners. Because The Chapel is incontestably an institution, the commissioner‘s own factual findings compel the conclusion that the property is exempt under Highland Park Owners.
{¶ 14} Against this straightforward reasoning, the commissioner denied the exemption on the grounds that merely holding the property open to the public and allowing various third parties to use it is not a charitable use and does not qualify [the property] for exemption under
{¶ 15} However, once his determination had been appealed to the BTA, the commissioner took a different tack by arguing that The Chapel should be precluded from seeking exemption under
Neither church ownership nor religious motivations defeat a claim of exemption for charitable use under
{¶ 16} As already noted, the commissioner‘s finding leads to the conclusion that the property is exempt pursuant to Highland Park Owners. Nonetheless, the BTA denied exemption because the property use was ancillary to the church‘s1
{¶ 17} The case law establishes that they are not. To be sure, we have stated that uses which are merely supportive of public worship may not be exempted. Faith Fellowship Ministries, Inc. v. Limbach (1987), 32 Ohio St.3d 432, 436, 513 N.E.2d 1340; accord Moraine Hts. Baptist Church v. Kinney (1984), 12 Ohio St.3d 134, 137, 465 N.E.2d 1281. But that statement occurs only in the context of a claim of exemption under
{¶ 18} [M]erely supportive of public worship characterizes land use that is not sufficiently linked by necessity to public worship and therefore does not qualify the land for the house-of-public-worship exemption under
{¶ 19} Indeed, our recent cases have insisted that religious ownership and motives are not inimical to a charitable-use claim. In True Christianity Evangelism v. Tracy (1999), 87 Ohio St.3d 48, 716 N.E.2d 1154, we addressed a claim of exemption under
{¶ 20} On remand, the BTA acknowledged that aspects of [the organization‘s president‘s] activities, and those of the institutions with which he is associated, may arguably be considered charitable in nature, but nonetheless denied exemption because the primary use to which the property is devoted is an evangelistic one. True Christianity Evangelism v. Tracy (Jan. 14, 2000), BTA No. 96-K-904, 2000 WL 31781, at * 2. Again we reversed. True Christianity Evangelism (2001), 91 Ohio St.3d 117, 742 N.E.2d 638. Because the case law established that the dissemination of useful information to benefit mankind is, traditionally, charity, and because the information disseminated by appellant attempts to encourage people to read the Bible and to live up to its moral standards, the use of the property qualified as charitable under
{¶ 21} Taken together, our two decisions in True Christianity establish that religious institutions may not be discriminated against in the consideration of a claim for exemption under
{¶ 22} Given the reassertion of the True Christianity doctrine in Church of God, the commissioner‘s attempted reliance on the latter case is anomalous. The commissioner charges that The Chapel has strategically postured its claim so as to avoid the limitations imposed with respect to
{¶ 23} The exemption claim in this case is the opposite of what we confronted in Church of God. Here the applicant argues not that the property‘s use is exempt by being ancillary to activities conducted elsewhere, but that the very activity on the property itself entitles it to exemption. And unlike the claimant in Church of God, The Chapel does not seek to expand the scope of the charitable-use exemption; it asks only to be granted the same exemption that any nonreligious entity would plainly qualify for pursuant to Highland Park Owners, 71 Ohio St.3d 405, 644 N.E.2d 284. Because the denial of the exemption claim by the commissioner and the BTA rests upon legal error, the BTA‘s decision must be reversed.
The tax commissioner has waived his objections to The Chapel‘s prospective-use argument, and the case will be remanded to the BTA
{¶ 24} Reversing the decision below requires us to consider two additional matters.
{¶ 25} First, the BTA acknowledged that it did not reach the question of whether or not the contested acreage was used for an exempt purpose on January 1 of the year for which exemption was requested, as the law requires. The Chapel v. Levin (Mar. 2, 2010), BTA No. 2007-V-2, at 1, fn. 1. As a general matter, the claimant must bear the burden to show that it meets the statutory prerequisites for the tax exemption or reduction. Key Servs. Corp. v. Zaino (2002), 95 Ohio St.3d 11, 15-16, 764 N.E.2d 1015; accord Anderson/Maltbie Partnership v. Levin, 127 Ohio St.3d 178, 2010-Ohio-4904, 937 N.E.2d 547, ¶ 16, quoting Ares, Inc. v. Limbach (1990), 51 Ohio St.3d 102, 104, 554 N.E.2d 1310 (in an exemption case the onus is on the taxpayer to show that the language of the statute ‘clearly express[es] the exemption’ in relation to the facts of the claim).
{¶ 26} On the other hand, the commissioner‘s final determination in this case did not make any findings concerning the relationship between the tax-lien date and when recreational use was intended or actually begun. The commissioner did not state that the time lapse constituted a ground for denying the exemption, nor did the commissioner mention the issue in his brief at the BTA. The latter omission is especially significant in light of the fact that The Chapel argued its
{¶ 27} Under all these circumstances, we hold that the commissioner has waived any reliance on arguments that the recreational use started at a later date than that requested in the exemption application. Once the commissioner‘s final determination omitted to address the issue as a ground for denying the exemption, that official incurred the burden to timely notify The Chapel that it must prove the existence of a previously unaddressed element of the exemption claim. Cf. Key Servs. Corp., 95 Ohio St.3d at 16 (BTA could not refuse to consider elements of a tax-reduction claim where during the BTA appeal the commissioner wanted to show that Key did not provide the services eligible for a refund under
{¶ 28} As a result of his omissions the commissioner, not The Chapel, is bound by waiver. On remand, the exemption will be granted with respect to the recreational acreage as of the tax-lien date to which the original exemption application relates.4
Conclusion
{¶ 30} For the foregoing reasons, the BTA acted unreasonably and unlawfully when it affirmed the denial of The Chapel‘s claim for charitable-use exemption. We therefore reverse the decision of the BTA and remand for further proceedings.
Decision reversed and cause remanded.
O‘CONNOR, C.J., and PFEIFER, LUNDBERG STRATTON, O‘DONNELL, LANZINGER, CUPP, and MCGEE BROWN, JJ., concur.
Leiby, Hanna, Rasnick, Towne & Evanchan and Stephen P. Leiby, for appellant.
Michael DeWine, Attorney General, and Ryan P. O‘Rourke and Sophia Hussain, Assistant Attorneys General, for appellee.
The Chapel did not seek additional remission beyond this. On remand, the BTA may furnish whatever additional clarification may be necessary concerning the amount of remission that pertains to the recreational acreage.