Science Fiction v. Dept. of Assessment
Annotate this Case
Download PDF
In the Circu it Court for B altimore C ity Case No. 24-C-03-005948 IN THE COURT OF APPEALS OF MARYLAND No. 49 September Term, 2004 ______________________________________ BALTIMORE SCIENCE FICTION SOCIETY, INC. v. STATE DEPARTMENT OF ASSESSMENT AND TAXATION ______________________________________ Bell, C.J. Raker Wilner Cathell Harrell Battaglia Greene, JJ. ______________________________________ Opinion by Wilner, J. ______________________________________ Filed: December 15, 2004 The issue befo re us is wh ether the M aryland Tax Court (w hich, despite its name, is an administrative agency and not a court) e rred in findin g that appe llant, Baltimore Science Fiction Society, Inc. (BSFS), is entitled to an exemption from property taxes on a building it owns in Baltimore City. The Circuit Co urt for Baltim ore City believed th at the agenc y did err by applying an incorrect standard to determ ine whether the structure was being used for an education al purpose and, on tha t ground, rev ersed the ag ency decision . Because we shall conclude that the agency did not apply the wrong standard and that its factual finding s were supported by substantial ev idence, w e shall revers e the judgm ent of the C ircuit Court. BACKGROUND Maryland Code , § 7-202(b) of the Tax-Property Article provides, in relevant part, that property is not subject to the State and local property tax if the property (1) is necessary for and actually used ex clusively for a c haritable or educatio nal purpo se to prom ote the general welfare of the people of the State and (2) is owned by a nonprofit charitable, fraternal, educational, or literary organization. Although the statute, read literally, requires that the property be used exclusively for a charitable or educational purpose, we have held that the requirement of exclusive use may be satisfied by a showing that the property is used prim arily for exemption purposes, with only incidental or occasional use for other purposes. Friends School v. Supervisor, 314 Md. 194, 201, n.3, 550 A.2d 657, 660, n.3 (1988); Supervisor v. Trs., Bosley Meth. Ch., 293 M d. 208, 2 15, n.5, 4 43 A.2 d 91, 95 , n.5 (1982); Lodge # 817 O rder of E lks v. Supervisor, 292 Md. 533, 541, 439 A.2d 591, 595 (1982). BSFS owns a two-story building at 3310-12 East B altimore Street. It purchased the property in 1991 and, fo r ten years , paid pr operty tax es on it. In August, 2001, BSFS applied to the State Department of Assessments and Taxation (SDA T) for an e xemption pursuant to § 7-202. When SDAT denied the exemptio n and the P roperty Tax A ssessmen t Appeals Board for Baltimore City affirmed that denial, BSFS appealed to the Tax Court, which reversed. There was no dispute before the Tax Court, and it is conceded here, that BSFS qualifies as a literary organization and therefore meets the second, or ownership , prong of the statutory requirement. The issue is whether the property was necessary for and ac tually used [primarily] for . . . an educational purpose. In that regard, the Tax Court found as fact that : (1) BSFS is a not-for-p rofit corpora tion organiz ed to promote the cultu ral, literar y, and educational advancement of science fiction and fantasy in the community at large and to promote public goodwill toward the science fiction community. In carrying out that mission, BSFS, among other things, participates in a regional Baltimore Science Fiction Fantasy Conference, organizes writing contests, provides writing workshops and seminars, raise s fun ds, and m ainta ins a lend ing library. (2) The proper ty is used f or all of the BS FS acti vities. None of it is used for any other activ ity. About 20-25% of the building space is used for the storage of supplies and other -2- items necessary for BSFS activities. The lending library takes up another 20-25% of the space. More than 30% is used for group functions, such as workshops and meetings. The building is open only on Saturday, Sunday, and Wednesday evenings, but during those times the public can visit the library or participate in other BSFS activities. (3) The organization is run entirely by volunteers, who donate time and money. Membe rs of BSFS pay annual dues. Non-members are allowed to use the library and attend all BSFS activities, but they do not usually visit the library or attend meetings. These findings were based on substantial evidence, which explained in some greater detail the functions of BSFS. Testimony was presented that, in addition to bi-monthly meetings, BSFS sponsors a three-to-four day annual conference promoting science fiction litera cy, a conference that attracts up to 2,500 people, including hard scientists from the Pentagon, from Joh ns Hop kins Univ ersity, and from the agenc y that operates th e Hubb le Space Telescope. As part of that conference, BSFS sponsors the Compton Crook Award, given to an autho r for the bes t first novel in th e science f iction, fantasy or horror genre.1 BSFS also spons ors an ann ual You ng Writer s Contest o pen to high school students, writing workshops, and readin gs and pre sentations by authors. The Young Writer s Contest produces 60 to 75 sh ort stories from high school students aro und the State. The library 1 Compton Crook was a physics teacher in Baltimore County who wrote science fiction under the name of Stephen Tall and who was an early supporter of BSFS. The prize is a memorial to him. There was testimony that the award is well-recognized and highly regarde d by its winne rs, and that the re are over 3 00 referen ces to it on the Internet. -3- contains about 6,000 books, but slightly less than half have been catalogued and are av ailable for borrowing. The writer s workshops are held both at the property and wherever the Annual Conference is held, which is usually elsewhere. Book discussions are held at the property on Sunday afternoons. In addition to these even ts, BSFS p articipates in the annual city-wide Book Fair and Artscape events. Evidence was presented that the equipment and materials necessary for these various ev ents are stored at the p roperty, even f or those ev ents held elsewhere. SDAT argued that the property did not qualify for the tax exemption because it was used primarily as a social or hobby club that the building is open only o n Sa turday, Su nday, and Wednesday evening, that some of the organization s major activities are held off-site or occur only infrequently, that the library is mostly for the members, that the function space is for business and social meetings, and that the existence of BSFS and its activities are not well-known to the public. Its witness contended that, because the property was not being used for systematic instruction, it was not being used for an educational purpose . In that regard, SDAT relied on its interpretation of this Court s decision in Comptroller v. Maryland State Bar, 314 M d. 655, 5 52 A.2 d 1268 (1989 ), a case w e shall d iscuss la ter. The Tax Court regarded that criterion for defining educational purpose as too limited and confining and essentially unworkable, and it adopted, instead, the view of the dissenting judges in Ladies Literar y Club v. City o f Gran d Rap ids, 298 N.W.2d 422, 427-30 (Mich. 1980) that a more standard dictionary definition of educational was approp riate, a -4- definition that encompassed cultural activities, such as museum trips and lectures. The Tax Court also noted that, although the statute requires that the property be primarily used for an exempt activity, it did not require that the property be freq uently used for that activity. It found that, although the building is closed m ost of the w eek, the pro perty, when o pen, is exclusively used to promote BSFS s educational purpose. It distinguished the situation of property being used for an exempt purpose part of the time and rented out for non-exempt uses at other times, noting that no part of the BSFS building was used at any time for a nonexempt purpose. T he storage a rea, it conclude d, furthered the educa tional purpo ses. Despite its modest level of recognition in the community, BSFS had, the Tax Court found, contributed to improving the general welfare of Marylanders by promoting literacy and attracting both new readers and new writers. Though recognizing that property tax exemptions are to be strictly construed (see Tax-Property Article, § 7-101 )), the Tax Cou rt held that the p lain mean ing of the sta tute must co ntrol. Aggrieved, SDAT sought judicial review in the Circuit Court for Baltimore City. That court took considerable umbrage at the Tax Court s rejection of a standard for defining educational purpose that it, too, believed was adopted by this Court in Comptroller v. Maryland State Bar. The Circu it Court of fered its own view that promoting science fiction is [not] what is deemed to be the operations of an educational institution and, accordingly, reversed the Tax Cou rt decision. BSFS appealed, and, because a major aspect of the case has significance beyond its par ticular facts, na mely, determin ing the standard to be applie d in -5- defining what constitutes an educational purpose when considering the use to which a literary organization puts its property, we granted certiorari on our own initiative, before the appea l was co nclude d in the C ourt of Specia l Appe als. SDAT insists that the governing standard is that which it regards as having been stated in Maryland State Bar and urges that, under that standard, property is not used for an educational purpose unless it is used for systematic instruction in a bran ch of le arning . SDAT contends that the Tax Court decision was properly reversed because (1) the agency refused to apply that standard, and (2) had it applied that standard, it would have been compelled to conclude that the BSFS property was not being used primarily for an educational purpose. BSFS notes that, in Maryland State Bar, we took that concept of systematic instruction from Black s Law Dictiona ry and points out that there are other dictionary definitions of educational purpose that are broader and more appropriate to use. DISCUSSION As noted, § 7-202(b) contains two requirements for an exemption a use requirement and an owne rship requ irem ent. T he prope rty mu st be nece ssary for a nd actua lly used primarily for a charitable or educatio nal purpose to promote the general welfare of the people of the State, and it must be owned by an enumerated kind of entity, the relevant entity in this ca se bein g a no nprof it charitab le, fratern al, educational, or literary organization. (Emp hasis added). -6- Two decisions of this Court from 1989 provide a proper context for examining the issue. In Friends School v. Supervisor, supra, 314 Md. 194, 550 A.2d 657, we considered whether the Tax Court had erred in concluding that a superintendent s residence on the campus of Friends School was not being used for an educational purpose because no educational activities were conducted there. There was no doubt that Friends School was an educational organization and that educational activities were conducted at the schoo l. On the campus was a ho me in wh ich the build ing superin tendent, who was responsible for the proper maintenance of all buildings, as well as for security and snow removal, was required to live. The building was equipped so that the superintendent could monitor the campus and be ab le to respo nd to pr oblem s. Although there was evidence that the proper maintenance of the plant was an important compon ent in carrying out the education al function of the scho ol, it was clear that no educational activities actually occurred in the ho me. For that reason, the Tax C ourt denied the exemption. We concluded that the Tax Court erred in applying that standard, and that, although the property for which the exemption is sought must be both necessary and used for an educational purpose, the statute did not require that educational activities take place on the particular property. We directed that the case be remanded to the Tax Court so it could apply the appropriate standard in its analysis of the underlying facts. The second case was Maryland State Bar, supra, 314 Md. 655, 552 A.2d 1268. That was not a prop erty tax exemp tion case bu t rather an attemp t by the Maryland State Bar -7- Association to obtain an exemption from the State sales tax. The statute provided an exemption from the payment of the sales tax for purchases of tangible personal prop erty made for use in carrying on the w ork of a nonp rofit relig ious, charitable, or educational institution or organization. Unlike the Friends School case, the direct issue was not how any Bar Association property was being used but rather the nature of the organizatio n itself whether the Bar Association was a charitable or educational organization. In examining that issue, the Tax Court focused on the various activities carried on by the A ssociation, in part by examinin g its internal structure and its budget. Special attention was given to the one committee particularly devo ted to educ ational activities. T he eviden ce show ed that, until 1975, that comm ittee the Co ntinuing L egal Edu cation Co mmittee h ad a fairly large budget, but that, when the Maryland Institute for Continuing Professional Education of Lawyers (MICP EL) wa s created as a separate, ind ependen t entity, that Institute assumed most of the form al education al activities prev iously conducted by the Bar Ass ociation, albe it with substantial Bar Association assistance. From all of the evidence, the Tax Court concluded that the Bar Association was essentially a professional organization operating for the benefit of its members and that the educational program s conduc ted by it were in cidental to tha t purpose, an d on that ba sis, it denied the exemption. The Circuit Court, on judicial review, made its own analysis of the evidence, found that the Assoc iation w as, inde ed, a charitable or educational organization, and rev ersed th e Tax C ourt. -8- Our task was to articulate the ap propriate stan dards to be used in defining a charitable and educational organization and to determine whether the Tax C ourt prope rly applied those standards. Looking to cases in other States, we adopted the view that, to be entitled to a sales tax exemption as a charitable organizatio n, the entity must b e organiz ed and op erated to benefit an indefin ite number of people and that the service offered to eligible persons must act to relieve the public of an obligation it would otherwise have to those persons. Con vers ely, we noted that, if the dominant p urpose of the organiz ation is to ben efit its members or a limited class of persons, it will not be regarded as a charitable organization, even if the public derives some incidental benefit from its work. Using that approach, we held that the Tax Court, on the record before it, did not err in concluding that the Bar Assoc iation w as not a charitab le organ ization. Id. at 670-71, 552 A.2d at 1275. We turned then to whether the Bar Association was an educational organization. The Tax Court, we said, seemed to deny the exemption based on a per se determination that the MSBA s educational activities were but an inciden tal by-product o f the Asso ciation s ove rall function to promote and protect the professional interests of its members. Id. at 672, 552 A.2d at 1276. We held that such a standard was too restrictive of the educational organization exemption in the statute and was not consistent with legislative intent. To be entitled to an exemption as an educational organization , the organization s focus must be primarily educational. We noted that the 5 th (1979) edition of Black s Law Dictionary defined educational purposes of an educational organization to encompass systematic -9- instruction in any and all branches of learning from w hich a sub stantial public b enefit is derived. Id. at 673, 552 A.2d at 1276, quoting from Black s Law Dictionary 461 (5 th ed. 1979) (Emp hasis added). Manife stly, we said, the term educational institution, as used in the sales tax statute, was not limited to schools, colleges, and universities, that, through its functioning parts, the Bar Association did provide a measure of systematic instruction to its members for the public good, that some o f its educatio nal pursuits w ere directed a t the public an d not just its members, and that it was therefore necessary to look at the organization as a whole to ascertain its primary or dominant purpo se. We directed that the case be remanded to the Tax Court for it to make that analysis.2 The Circuit Court seemed to view our decision in Maryland State Bar as defining educational purpose in a w ay that required systematic instruction in some branch of learning to be conducted at the property. That is not what the Court said, and it is not what the Court meant. The definition we cited from the 5 th edition of Black s Law Dictionary stated in full: Educational purposes. Term as used in constitutional and statutory provisions e xempting property so used from taxation, includes systematic instruction in any and all branches of learning from which a substantial public benefit is derived, and 2 It is of interest to note that, on remand, the Tax Court, applying the standard we adopted, found that the Bar Association constituted a charitable/educational organization and w as exem pt from paying th e sales ta x. See Maryland State Bar Association v. Comptroller, 1990 WL 135004 (M d. Tax. Ct. 1990). -10- is not limited to such school properties as would relieve some substantial educational burden from the state. McKee v. Evans, Alaska, 490 P.2d 1226, 1230. (Em phasis added). 3 We note first that th at definition, which has been dropped from later editions of Black s Law D ictionary,4 did not pu rport to limit an education al purpose to systematic instruction, but simply pointed out that the term includes such instruction. The w ord includes is not a word of limitation but rather indicates that the item denoted is a constituent part of s ometh ing larg er. See 2 nd edition of Webster s New Universal Unabridged Dictionary 923; also Maryland Code, Article 1, § 30 ( The words includes or including mean, unless the context requires otherwise, includes or including by way of illustration and not by way of limitation. ) (Emphasis added ). That is what the Court obviously meant when it noted that the definition encompass[ed] systematic instruction. Had we believed that the requirement of an education al purpose could be s atisfied only by systematic instruction, we would have been required to affirm the decision of the Tax Court based on the record before 3 The McKee case was cited more for the last statement. The question there was whether property owned by a Trust created through a collective bargaining agreement between electrical contractors and an electricians union, used to train apprentice electricians, constituted a use for educational purposes. The Alaska court noted that some courts had limited an exemption for educational institutions to those in which the instructional program paralleled that offered in publicly supported educational institutions. The Alaska court found that too limiting and concluded that educational purpose included systematic instruction in all branches of learning from which a substantial public benefit is derived. The definition taken from the 5th edition survived in the 6th (1990) edition but was dropped from the 7th (1999) edition, which constituted a major substantive revision of the dictionary, and does not appear in the 8th (2004) edition. 4 -11- us, rather than remand the case for further consideration by the agency, for it was clear that the predominant purpose of the Bar Association was not to conduct systematic instruction. As the Friends School and Maryland State Bar cases make clear, the adjective education al cannot be limited in the w ay posited by SD AT and decreed b y the Circuit Court. Formal instruction may be the heart of edu catio n, bu t it is n ot the ent ire body. Webster s defines the verb edu cate as to give knowledge or training to; train or develop the knowledge, skill, mind, or character of, especially by formal schooling or study; teach; instruct. Webster s New Universal Unabridged Dictionary 576 (2 nd ed. 1983). That allows for other methods of imparting knowledge and training. Courts have found that a museum may con stitute an educa tional pu rpose. See Georgia O Keeffe Museum v. County o f Santa Fe, 62 P.3d 7 54 (N.M . 2002); In re Everso n s Will, 52 N.Y.S.2d 395 (N.Y. App. Div. 1944). See also State T ax Com m. v. White hall, 214 Md. 316, 323, 135 A.2d 298, 301 (1957) (use of propert y by Foundation to conduct experiments in breeding of dairy cattle was for charitable and educational purpose; experiments are comparable to research carried on under grants at universities and add to the dissemination and general store of scientific knowledge ); Oregon Writer s Colony v. Dep t of Revenue, 1996 WL 706994 (Or. Tax), 14 Or. Ta x 69 (1 996). The Tax Court properly rejected the confining definition of educational purpose proposed by SDA T and ad opted a m ore realistic con cept. There is, necessarily, a certa in affinity between educational and literary functions and activities. A library serves an -12- educational purpose; writing workshops and readin gs and pre sentations b y authors con stitute an educational purpose; encouraging high scho ol students to compos e literature is education al. As we h ave obse rved, the fin dings that the Tax C ourt made , which led it to conclude that the property was, in fact, being used for an educational purpo se, were supported by substantial evidence, and its decision should therefore have been affirmed by the Circuit C ourt. 5 JUDGMENT OF CIRCUIT COURT FOR BALTIMORE CITY REVERSED; CASE REMANDED TO THAT COURT WITH INSTRUCTIONS TO AFFIRM ORDER OF MARYLAND TAX COURT; COSTS TO BE PAID BY APPELLEE 5 In upholding the Tax Court s decision in this case, we do not dismiss out of hand SDAT s concern that the property was open only three days a week; nor do we embrace as a gen eral pro position that a lim ited use of pro perty for a n exem pt purp ose is irre levant. As noted, the Tax Court drew a distinction between property used for both exempt and non-exempt pu rposes and prope rty being used solely for an exemp t purpose but only part of the time. That distinction itself has some limits; to qualify for an exemption the property must be primarily used for an exempt purpose. In this case, given the overall use of the prop erty in question, in cluding the on-going storage of materials ne cessary to support the educational functions carried on by BSFS, the Tax Court in this case did not err in finding that the primary use was for an educational purpose. -13-
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
