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Thursday, May 29, 2008

Ind. Decisions - Tax Court finds RV Park eligible for a religious purposes exemption [Updated]

In Cedar Lake Conference Association v. Lake County Property Tax Assessment Board of Appeals, a decision dated May 28th, 2008, Indiana Tax Court Judge Fisher writes:

Cedar Lake Conference Association (CLCA) challenges the final determination of the Indiana Board of Tax Review (Indiana Board) which upheld the Lake County Property Tax Assessment Board of Appeals’ (PTABOA) denial of CLCA’s application for a religious purposes exemption on its real property for the 2000 tax year (year at issue). The question before this Court is whether the Indiana Board’s final determination is supported by substantial evidence.

CLCA is an Indiana not-for-profit corporation whose stated purpose is “to conduct religious services and promote religious education.” CLCA owns and operates the Cedar Lake Bible Conference Center RV Park and Campground in Cedar Lake, Indiana. * * *

During the year at issue, CLCA used the RV Park in conjunction with the Conference Center “to promote Christian principles to youth and adults in a camp environment.” As such, participants of CLCA’s programmed events used the RV Park (“affiliated” individuals). The RV Park was also used by “non-affiliated” individuals (i.e., those who did not attend CLCA’s programmed events), other non-profit organizations, churches, and prison ministries. * * *

While property tax exemption statutes are strictly construed against the taxpayer and in favor of the State, an exemption will not be construed so narrowly that the legislature’s purpose in enacting it is defeated or frustrated. * * * Thus, the fact that the RV Park and the Conference Center are delimited (i.e., they are separate parcels with distinct key numbers) neither alters the manner in which CLCA used those properties nor diminishes CLCA’s religious purpose. * * * Furthermore, the fact that some recreational activities may have taken place on the RV Park does not necessarily lead to the conclusion that CLCA’s use of the property does not further its religious purposes. * * * Consequently, when the evidence and testimony presented by CLCA are viewed in their entirety, it is apparent that CLCA predominately used the RV Park for religious purposes.

CONCLUSION For the above stated reasons, the Indiana Board’s final determination is not supported by substantial evidence and is therefore REVERSED. The matter is REMANDED to the Indiana Board so that it may instruct the appropriate assessing officials to take actions consistent with this opinion.

Readers may recall this ILB entry from May 26th headed "Exemptions for Charities Face New Challenges."

[Updated 5/30/08] "Tax Court reverses rulings denying religious tax exemption" is the headline of an AP story today. Some quotes:

A Christian campground is entitled to a religious tax exemption even though some recreational activities may have occurred there, the Indiana Tax Court has ruled.

The ruling overturned decisions by the Indiana Board of Tax Review and Lake County Property Tax Assessment Board of Appeals denying the religious exemption for the Cedar Lake Conference Association, which owns and operates the Cedar Lake Bible Conference Center RV Park and Campground.

The association is a not-for-profit corporation whose stated purpose is "to conduct religious services and promote religious education," according to court documents. The 27-acre RV park, which includes an archery range, walking trails and a prayer garden, was used by churches, prison ministries and other organizations as well as by people who did not attend its programmed religious events. * * *

The state board had found that the association failed to prove that the RV park was predominantly used for religious purposes because it did not document a breakdown of the time spent on religious and non-religious activities.

But the tax court found that the association had maintained the RV park was integral to its religious mission and that more than 67 percent of the park's income came from individuals who participated in its religious programs.

The tax court found that "it is apparent that CLCA predominantly used the RV Park for religious purposes" and "the fact that some recreational activities may have taken place on the RV Park does not necessarily lead to the conclusion that CLCA's use of the property does not further its religious purposes."

Posted by Marcia Oddi on May 29, 2008 05:14 PM
Posted to Indiana Decisions