VT Alliance of Nonprofit Organizations v. City of Burlington
Annotate this Case
VT Alliance of Nonprofit Organizations v. City of Burlington (2003-436);
177 Vt. 47; 857 A.2d 305
2004 VT 57
[Filed 18-Jun-2004]
NOTICE: This opinion is subject to motions for reargument under V.R.A.P.
40 as well as formal revision before publication in the Vermont Reports.
Readers are requested to notify the Reporter of Decisions, Vermont Supreme
Court, 109 State Street, Montpelier, Vermont 05609-0801 of any errors in
order that corrections may be made before this opinion goes to press.
2004 VT 57
No. 2003-436
Vermont Alliance of Nonprofit Organizations Supreme Court
On Appeal from
v. Chittenden Superior Court
City of Burlington April Term, 2004
Matthew I. Katz, J.
Neil H. Mickenberg of Mickenberg, Dunn, Kochman, Lachs & Smith, PLC,
Burlington, for Plaintiff-Appellee.
Nikki A. Fuller, Assistant City Attorney, Burlington, for
Defendant-Appellant.
PRESENT: Amestoy, C.J., Dooley, Johnson, Skoglund and Reiber, JJ.
¶ 1 SKOGLUND, J. The City of Burlington appeals from a
Chittenden Superior Court decision holding that the City had no authority
to tax the business personal property of the Vermont Alliance of Nonprofit
Organizations (VANPO). We agree that the plain language of 32 V.S.A. §
3618(c)(1) limits the City's ability to tax business personal property to
those of businesses conducted for profit. We affirm.
¶ 2 In response to a tax notice from the City, VANPO requested
tax-exempt status for its business personal property on grounds that it was
a nonprofit organization. VANPO's request was denied by the City Assessor,
then by the Board of Assessors and finally, by the Burlington Board of Tax
Appeals. VANPO then appealed to the Chittenden Superior Court. In its
motion for summary judgment, VANPO argued that it is a nonprofit
organization and therefore business personal property was not taxable
because 32 V.S.A. § 3618(c)(1) expressly defines "business personal
property" eligible for taxation as "tangible personal property" used in any
trade, business, or activity "conducted for profit."(FN1)
¶ 3 The City filed a cross-motion for summary judgment asserting
that the Legislature did not intend § 3618(c)(1) to exempt personal
property of businesses not conducted for profit and, if it had, it would
have done so by including it in the list of exemptions found in Chapter 125
of Title 32, specifically § 3802(4). Section 3802 enumerates, in fifteen
subsections, when real or personal property may be exempt from taxation.
See 32 V.S.A. § 3802. Subsection (4) provides an exemption for "[r]eal and
personal estate granted, sequestered or used for public, pious or
charitable uses . . . ." Id. at § 3802(4).
¶ 4 The superior court found in favor of VANPO, holding that §
3618(c)(1) governed the question of whether the City may tax VANPO's
personal property. Since § 3618(c)(1) exempts business personal property
of nonprofit organizations from taxation and VANPO is a nonprofit, the
court found that "there is no authority to tax its business personal
property." This appeal followed.
¶ 5 On appeal, the parties debate the primacy of separate
statutes governing property taxation. The parties agree that there were
no facts in dispute before the trial court.(FN2) Our review of the
taxation statutes involved and the question of law determined by the
superior court is nondeferential and plenary. See Thompson v. Dewey's S.
Royalton, Inc., 169 Vt. 274, 276, 733 A.2d 65, 67 (1999); Sigler Found. v.
Town of Norwich, 174 Vt. 129, 130, 807 A.2d 442, 443-44 (2002).
¶ 6 The issue for this Court involves the reconciliation of
allegedly competing statutes and is one of first impression. In
interpreting a statute, it is paramount that the intent of the legislature
be ascertained and given effect. Hartford Bd. of Library Trs. v. Town of
Hartford, 174 Vt. 598, 599, 816 A.2d 512, 515 (2002) (mem.). "[L]aws
relating to a particular subject 'should be construed together and in
harmony if possible.' " Holmberg v. Brent, 161 Vt. 153, 155, 636 A.2d 333,
335 (1993) (quoting Downtown Rutland Special Tax Challengers v. City of
Rutland, 159 Vt. 218, 221, 617 A.2d 129, 131 (1992)). Moreover, "we must
read the separate clauses of this [tax] statute together, as parts of a
unified statutory system." Lincoln St., Inc. v. Town of Springfield, 159
Vt. 181, 184-85, 615 A.2d 1028, 1030 (1992) (quoting American Museum of Fly
Fishing, Inc. v. Town of Manchester, 151 Vt. 103, 108, 557 A.2d 900, 904
(1989) saying that legislative intent is not gathered from "isolated
sentences or phrases, but the whole and every part of the statute, the
subject matter, the effects and consequences, and the reason and spirit of
the law"). However, when a statute is without ambiguity and plain on its
face, we will enforce it according to its terms and "there is no need for
construction; the legislative intent is to be ascertained from the act
itself." Hill v. Conway, 143 Vt. 91, 93, 463 A.2d 232, 233 (1982).
¶ 7 Chapter 123 of Title 32 establishes how, where, and to whom
property should be taxed, including what type of property is subject to
taxation. It creates the authority for towns and municipalities to tax
both real and personal property as defined within the statute. 32 V.S.A.
§§ 3602-3692. Municipalities are authorized to tax "tangible personal
estate" pursuant to 32 V.S.A. § 3691, which is defined elsewhere as "all
property other than real estate." 1 V.S.A. § 129. What constitutes
tangible business personal property and how it should be taxed is
specifically addressed in 32 V.S.A. § 3618.
¶ 8 In contrast, Chapter 125 of Title 32 sets forth specific
types of property that are expressly exempt from taxation. Included in
that chapter is the authority for a municipality to "elect not to tax, in
whole or in part, business personal property." 32 V.S.A. § 3849(a).
Section 3849(b) states in full: "[a]s used in this section 'business
personal property' means property defined in section 3618(c) of this
title." Id. at § 3849(b).
¶ 9 After comparing these separate chapters and the specific
provisions therein, we conclude that the court was correct in holding that
§ 32 V.S.A. § 3618(c)(1) controls, and that only business personal property
as defined therein is subject to municipal taxation. The plain language
of § 3618(c)(1) excludes by definition business personal property of
nonprofits from the class of property that could be considered taxable.
This reading of the statutes finds support in the Legislature's use of the
same definition of business personal property in § 3618(c)(1) and again in
§ 3849(b), in the chapter enumerating what type of taxable property is
exempt from taxation. On these grounds, we find that 32 V.S.A. §
3618(c)(1) governs the question of whether the City can tax business
personal property of nonprofit businesses and, since VANPO is a non for
profit enterprise, the City lacks the authority to tax its personal
property.
¶ 10 After reminding us that "exemptions from taxation are to be
strictly construed, and that no claim of exemption can be sustained unless
within the express letter or necessary scope of the exempting clause,"
English Language Ctr. v. Town of Wallingford, 132 Vt. 327, 329, 318 A.2d 180, 182 (1974), the City argues that to read § 3618 as excluding all
business personal property of nonprofits would create a broad exemption
unintended by the Legislature. The only appropriate place, the City
insists, to give such an exclusion would be under an exempting clause in
Chapter 125. This approach, according to City, is the only reconciliation
of the statutes that avoids inconsistencies with other provisions found in
Chapter 125 and existing case law.
¶ 11 Specifically, the City suggests that if VANPO wants its
property to be tax-exempt, it must qualify for the specific exemption
contained in § 3802(4) which excludes personal estate "used for public,
pious or charitable uses" from taxation. See 32 V.S.A. § 3802(4). This
might be true had the definition of business personal property provided in
§ 3618(c)(1) not expressly excluded nonprofit business personal property
from that which can be considered taxable. As VANPO points out, § 3618
provides no authority to tax personal property of a business operated not
for profit. One does not reach the issue of "exemption" if the property in
question is not the type or kind of property that is subject to tax in the
first instance.
¶ 12 The City also suggests that if § 3618 precludes the City
from taxing the personal property of nonprofit businesses, there would be
no need for the Legislature to have promulgated § 3802(15) which provides
tax exemption for the "[r]eal and personal property owned by a charitable,
nonprofit organization devoted to the welfare, protection and humane
treatment of animals." Granted the exemption found in § 3802(15) overlaps
somewhat with § 3618, but it is in no way redundant, as § 3802(15) grants
tax exemption to both real and personal property of a specific class of
non-profit organizations. In any event, this overlap does not affect the
fact that the Legislature excluded personal property of nonprofit
businesses from the class of property subject to tax in the first instance.
¶ 13 Finally, the City insists that the superior court's
interpretation makes a substantial body of case law interpreting § 3802(4)
"nonsensical," citing to various cases in which this Court addressed the
tax-exempt status of property owned by nonprofit organizations. See
American Museum of Fly Fishing, 151 Vt. at 108-10, 557 A.2d at 903-05;
Sigler, 174 Vt. at 131-135, 807 A.2d at 445-47; Inst. of Prof'l Practice,
Inc. v. Town of Berlin, 174 Vt. 535, 536-39, 811 A.2d 1238, 1239-43 (2002)
(mem.). The cases cited are distinguishable, however, because they
involved only real property, not personal property, and evaluated whether
the organization's use of the land met designated criteria to gain
tax-exempt status, under either the "essential governmental function" test,
American Museum of Fly Fishing, 151 Vt. at 110-11, 557 A.2d at 904-05
(rejecting "essential governmental function" test in favor of "public use"
test) or the "public use" test, Sigler, 174 Vt. at 131-135, 807 A.2d at
445-47 (whether real property benefitted an indefinite class of persons who
are part of the public); Inst. of Prof'l Practice, 174 Vt. at 536-38, 811 A.2d at 1240-42 (same). Our resolution of the question presented in this
case in no way conflicts with existing case law.
¶ 14 Because of the limitation for purposes of taxation to
personal property held by a business operated for profit found in § 3618,
we affirm.
Affirmed.
FOR THE COURT:
_______________________________________
Associate Justice
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Footnotes
FN1. 32 V.S.A. § 3618 reads in pertinent part:
(C) As used in this section:
(1) "Business personal property" means tangible personal
property . . . held for use in any trade, business, . . .
activity or occupation conducted for profit . . . ."
FN2. The parties stipulated that VANPO is a Vermont nonprofit corporation,
that it has tax exempt status as a charitable organization under §
501(c)(3) of the United States Internal Revenue Code, and that "[a]s a not
for profit corporation, VANPO's activities, including, without limitation,
its business activities, are not conducted for profit."
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