Our Lady of Ephesus House of Prayer, Inc. v. Town of Jamaica (2004-001);
178 Vt. 35; 869 A.2d 145
2005 VT 16
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
2005 VT 16
Our Lady of Ephesus House of Prayer, Inc. Supreme Court
On Appeal from
v. Windham Superior Court
Town of Jamaica September Term, 2004
John P. Wesley, J.
Christina Reiss of Gravel and Shea, Burlington, for Plaintiff-Appellant.
Robin Stern of Potter Stewart, Jr. Law Offices, P.C., Brattleboro, for
PRESENT: Dooley, Johnson, Skoglund and Reiber, JJ., and
Allen, C.J. (Ret.), Specially Assigned
¶ 1. DOOLEY, J. Plaintiff, Our Lady of Ephesus House of Prayer,
Inc. (OLEHOP), appeals a superior court judgment that declined to increase
the portion of plaintiff's property exempt from property taxation beyond
the amount determined in a previous ruling. OLEHOP argues that all of its
property is exempt as either a pious or public use. We affirm.
¶ 2. OLEHOP is a nonprofit corporation organized in Vermont and
granted tax-exempt status as a church under § 501(c)(3) of the Internal
Revenue Code by the U.S. Internal Revenue Service (IRS). Mary and Donald
Tarinelli incorporated OLEHOP after visits to a shrine at the last
residence of Mary, the mother of Christ, in Ephesus, Turkey. The
Tarinellis deeded OLEHOP 81.7 acres of land, subdivided from the land
surrounding their own residence, in the Town of Jamaica. A private road
serves a common driveway for both the Tarinelli's house and OLEHOP's
¶ 3. Plaintiff's by-laws describe it as a "private institution which
exists for the purpose of nurturing the spiritual growth and development of
all those who come into association for religious services, periods of
meditation, and spiritual retreats." In OLEHOP's application to the IRS
for tax-exempt status, it represented itself as a church without membership
and open to persons of all faiths. Plaintiff further indicated that it
holds services for weddings, stations of the cross, rosary, catechism, and
occasional meetings for visiting priests. OLEHOP described its
ecclesiastical government as "Catholic Faith-this church does not have
¶ 4. There are several buildings on OLEHOP's property, including a
main barn, a smaller barn, three sheds and an abandoned sugarhouse. In
2001, the west end of the main barn was converted into a small chapel. In
2002, OLEHOP began work on a second, larger chapel next to the smaller one,
and this work was largely completed in 2003 although the chapel remains
unheated. Another part of the barn served as an indoor riding ring, and,
following the collapse of the roof in this area, the space has been
converted into outdoor parking. Also, the stable area in the barn was
converted into room units with bathrooms, and above that two units were
constructed for visiting priests. Next to the small chapel is a meditation
garden and pathway with the Stations of the Cross.
¶ 5. The main part of OLEHOP's property is open and undeveloped.
Approximately 22.8 acres consists of fenced fields and pastures. The
remaining acreage is wooded, with an extensive network of bridle trails
running through it. Some of this woodland was sugared in the past.
¶ 6. The Jamaica listers set plaintiff's property at $511,700 in
2000, and plaintiff grieved the assessment, claiming the entire property
was exempt because it was a religious society. In response, the listers
adjusted the assessment to $341,500, and plaintiff filed for a declaratory
judgment in superior court. In that action, the court accepted that the
property was used for "pious" purposes, a prerequisite for exemption from
property taxation under 32 V.S.A. § 3802(4), but further concluded that a
limiting provision, 32 V.S.A. § 3832(2), allowed only part of the property
to be exempt: a small portion of the barn renovated as a modest chapel,
its lawn, the meditation garden and the pathway containing the Stations of
the Cross. Accordingly, the court granted plaintiff an exemption for ten
percent of the barn's total value and its accompanying well and septic
system, and for six acres containing the garden, lawn, and Stations of the
Cross. The total exemption was $38,494, and the resulting property value
subject to tax was $473,206.
¶ 7. OLEHOP then undertook further renovations to the property,
adding the large chapel, the room units and the parking area as described
above, and sought another declaratory judgment, asking the court to
reexamine the proportion of the property exempt from property taxes in
light of the changes. The renovations were incomplete in 2002 at the
listers' assessment, but were "substantially complete" when the court
issued its order in 2003.
¶ 8. In this second proceeding, plaintiff advanced a new theory.
Plaintiff argued that it was not a "religious society," under the operative
language in the limitation of 32 V.S.A. § 3832(2), and that all of its
property should be exempt under the "public use" exception of 32 V.S.A. §
3802(4). In the alternative, OLEHOP argued that even if it was a
"religious society" engaged in pious uses, it was entitled to more than a
ten percent property tax exemption.
¶ 9. The court found that there was no basis to exempt plaintiff's
entire property. Specifically, the court rejected plaintiff's claim that
it is not a religious society. The court did not articulate a definition
for a religious society and acknowledged that the term was ambiguous. It
found, however, that "the Legislature must have intended to include any
organization which, as Plaintiff did here, represented itself as a 'church'
to the Internal Revenue Service." Although OLEHOP argued that all of its
property should be exempt as a "public use," the court rejected this claim
because the property was unquestionably being used for pious purposes.
Further, the court found that the limitations of § 3832(2) would apply
regardless of whether the use was defined as public or pious because the
real estate is "owned or kept by a religious society." The court denied
plaintiff's request to expand the tax exemption from the 2001 order,
finding that, even considering the changes made to the property, no greater
proportion of OLEHOP's property was eligible for exemption.
¶ 10. We view the trial court's factual findings in the light most
favorable to the party prevailing below and will set them aside only for
clear error. Brown v. Whitcomb, 150 Vt. 106, 109, 550 A.2d 1, 3 (1988).
Our review of questions of law is nondeferential and plenary. Vt. Alliance
of Nonprofit Orgs. v. City of Burlington, 2004 VT 57, ¶ 5, 15 Vt. L. Wk.
183, 857 A.2d 305. Issues of statutory construction are questions of law
and, thus, subject to a nondeferential standard of review. State v. Koch,
169 Vt. 109, 112, 730 A.2d 577, 580 (1999).
¶ 11. We divide OLEHOP's appellate issues into two categories: those
that would result in a determination that all of its property is exempt
from taxation, and those that would increase the share of its exempt
property. We begin with the first category.
¶ 12. OLEHOP's main argument is that it is not subject to 32 V.S.A.
§ 3832(2), primarily because it is not a "religious society," but also
because its real estate is sequestered and used for both public and pious
uses. That subsection provides:
The exemption from taxation of real and personal estate granted,
sequestered or used for public, pious or charitable uses shall not
be construed as exempting:
. . . .
(2) Real estate owned or kept by a religious society other than a
church edifice, a parsonage, the outbuildings of the church
edifice or parsonage, a building used as a convent, school,
orphanage, home or hospital, land adjacent to any of the buildings
named in this subsection, kept and used as a parking lot not used
to produce income, lawn, playground or garden and the so-called
32 V.S.A. § 3832 (emphasis added). This provision must be read with the
applicable property tax exemption statute:
The following property shall be exempt from taxation:
. . . .
(4) Real and personal estate granted, sequestered or used for
public, pious or charitable uses; real property owned by churches
or church societies or conferences and used as parsonages and
personal property therein used by ministers engaged in full time
work in the care of the churches of their fellowship within the
state . . . .
Id. § 3802(4).
¶ 13. As set out above, this argument represents a change from
OLEHOP's position in 2001 that resulted in the declaration that ten percent
of the barn's value and a small portion the acreage was exempt from
property taxation. Under OLEHOP's current argument its real property is
exempt under § 3802(4) as "real . . . estate granted, sequestered or used
for public, pious or charitable uses," but the exemption is not limited
under § 3832(2) because the limitation applies to "real estate owned or
kept by a religious society" and only if the use creating the exemption is
solely "pious." Id. § 3832(2). OLEHOP submits that it is not a religious
society because it does not "have a membership, established vows or tenets,
and does not engage in the teaching or indoctrination of either the Board
of Trustees or the members of the public which visit the Property." It
submits that the use is public because any member of the public can use the
chapel and grounds to meditate, contemplate or pray. We find that
plaintiff is a religious society and its use is subject to the exemption
limits of § 3832(2).
¶ 14. We must consider OLEHOP's arguments in light of the statutory
scheme designed by the Legislature. Our primary goal in interpreting a
statute is to give effect to the Legislature's intent. Town of Killington
v. State, 172 Vt. 182, 188-89, 776 A.2d 395, 400-01 (2001). If terms are
unambiguous we use the plain meaning, but "we will not enforce the common
and ordinary meaning of statutory language if doing so would render the
statute ineffective or lead to irrational results." Id. Furthermore, in
construing tax exemptions, the burden is on the person claiming the benefit
of the exemption, In re Aloha Found., Inc., 134 Vt. 239, 240, 360 A.2d 74,
___ (1976), and the exemption statute must be strictly construed against
that person, In re Abbey Church, 145 Vt. 227, 229, 485 A.2d 1263, 1264
¶ 15. Our main precedent on the interrelationship between the
property tax exemption in § 3802(4) and the limitation in § 3832(2) is In
re Abbey Church. In Abbey Church, we rejected the argument that § 3832(2)
was an expansion of § 3802(4)'s general terms. 145 Vt. at 229, 485 A.2d at
1265. The issue in Abbey Church was whether a private individual, who
owned property leased to a church, could claim the exemption from property
taxation because the property was "kept" by the church as provided by §
3832(2). We held that the exemption was unavailable because § 3802(4) did
not apply unless the property was owned by a charitable organization. Id.
at 230, 485 A.2d at 1265. In response to the argument under § 3832(2), we
held that this section limits the scope of § 3802(4) and cannot create a
right to an exemption independent of § 3802(4). Id. at 229, 485 A.2d at
1265; see 32 V.S.A. § 3832 (prefacing the list of exceptions for property
tax exemption with: "[t]he exemption from taxation of real and personal
estate granted, sequestered or used for public, pious or charitable uses
shall not be construed as exempting") (emphasis added).
¶ 16. This interpretation is consistent with our rule of
construction that "[w]here two statutes cover the same subject and one is
more specific than the other, we harmonize them by giving effect to the
more specific provision according to its terms." Cent. Vt. Hosp., Inc. v.
Town of Berlin, 164 Vt. 456, 459, 672 A.2d 474, 476 (1995). Also, newer
statutes will be enforced over older statutes, if there is a conflict. Id.
Further, we earlier held that the purpose of § 3832 was to respond to "a
growing complaint about the removal from taxation of real estate held for
tax exempt purposes." Troy Conference Acad. v. Town of Poultney, 115 Vt.
480, 490, 66 A.2d 2, 9 (1949).
¶ 17. As did the trial court, we need deal only briefly with the
argument that because OLEHOP admits the public generally, it is not subject
to the limitations of § 3832(2). This section specifically provides that
its limitations apply to property whether it is sequestered or used "for
public, pious or charitable uses." 32 V.S.A. § 3832(2) (emphasis added).
Thus, under the language's plain meaning, it does not matter whether its
use is exempt because it is public or pious. In either case, if OLEHOP is
a religious society, the extent of its tax exemption must be determined
under § 3832(2).
¶ 18. We must then review the trial court's determination that
OLEHOP is a religious society. This is a mixed question of fact and
law-the factual determination will be overturned only if clearly erroneous;
the review of the legal conclusion is plenary. MacDonough-Webster Lodge
No. 26 v. Wells, 2003 VT 70, ¶ 17, 175 Vt. 382, 834 A.2d 25. We will
reverse the superior court decision only if OLEHOP is not a religious
society as a matter of law.
¶ 19. The term religious society is quite broad. "Society" is
defined as "[a]n association or company of persons united by mutual
consent, to deliberate, determine, and act jointly for a common purpose."
Black's Law Dictionary 1396 (7th ed. 1999). Religious is defined as
"having or showing belief in and reverence for God or a deity." American
Heritage College Dictionary 1153 (3rd ed. 1997). Therefore, by these
dictionaries, a religious society would encompass any association of
persons united in a common purpose through their belief in God or a deity.
¶ 20. We recognize that the term "religious society" has been used
for centuries. The second sentence of Chapter II, § 68 of the Vermont
All religious societies, or bodies of people that may be united or
incorporated for advancement of religion and learning, or for
other pious and charitable purposes, shall be encouraged and
protected in the enjoyment of the privileges, immunities, and
estates, which they in justice ought to enjoy under such
regulations as the general assembly of this state shall direct.
To a very limited degree, they are specially regulated by Chapter 13 of
Title 11, and § 1501 refers to such societies as having members.
¶ 21. OLEHOP argues that it is not "religious" within the meaning
of § 3832(2) because it does not have established vows or tenets and does
not engage in teaching or indoctrination. The superior court rejected this
position largely based on OLEHOP's filing with the IRS that it was a church
affiliated with the Roman Catholic religion. We also note that in OLEHOP's
articles of association, filed with the State, it wrote that it is
"organized exclusively to provide facilities for the personal growth of
individuals through reflection and prayer in the Roman Catholic tradition."
Further, in its grievance to the Board of Listers on July 16, 2002, OLEHOP
claimed that it was a "not-for-profit religious organization established
for the purpose of providing a religious house of prayer." Although these
self-representations are not determinative, the superior court could rely
upon them in reaching its own conclusion about the nature of the
¶ 22. Moreover, OLEHOP's words are supported by its undisputed
activities. As OLEHOP acknowledged in its brief to this Court, "[t]he
evidence establishes that OLEHOP uses its sacristy, larger chapel, smaller
chapel, visiting priest's quarters, Stations of the Cross, replica house,
meditation garden and adjoining parking lot for pious purposes on
considerably more than a de minimus basis." OLEHOP has a chapel with pews
and "artifacts associated with religious worship."
¶ 23. Just as the fact-finding is against OLEHOP's position, we view
its definition of "religious" in § 3832(c) as too narrow. OLEHOP's lack of
formal dogma does not prevent it from being a religious society. See Lamad
Ministries, Inc. v. Dougherty County Bd. of Tax Assessors, 602 S.E.2d 845,
853 (Ga. Ct. App. 2004) ("It is not the number of worshipers or the
frequency of worship, but the primary use that defines a place of worship.
A place of worship is no less a place of worship, because it allows all to
freely worship as they believe or chose [sic] and does not impose a dogma
or ritual."); Goodwill Home & Missions, Inc. v. Garwood Borough, 658 A.2d 1330, 1333-34 (N.J. Super. Ct. App. Div. 1995) (finding that a group
conducting religious services and accepting persons of all denominations
constituted a religious congregation); 2 T. Cooley, The Law of Taxation §
742, at 1552 (4th ed. 1924) ("In order to be exempt as a 'religious'
society, it is not necessary that the sole purpose be public worship in a
church, and it has been held that the exemption includes a publishing house
printing and distributing religious books."). OLEHOP's operation is based
on a "belief in and reverence for God," as the dictionary definition
¶ 24. We also reject the argument that OLEHOP cannot be considered
a society because it has no members. To the extent members are needed,
OLEHOP has members sufficient to be considered a society. In this respect,
the case is very similar to In re Estate of Curtis, 88 Vt. 445, 92 A. 965
(1915). Curtis involved inheritance taxes under a statute that exempted
legacies to an in-state "charitable, educational or religious society or
institution." 88 Vt. at 448, 92 A. at 966. The testatrix left a sum of
money to three trustees to hold and invest until it reached a certain sum
and then to expend it to aid young women and men to obtain an education.
This Court posed the issue as whether "the trustees were at liberty to
become, and by their action since have become, a society within the meaning
of the statute to receive and administer the trust." Id. at 451, 92 A. at
967-68. Using a broad definition of a society as set out above, the Court
held that the trustees were a society:
If the individuals named in the will as trustees had voluntarily
associated themselves for the purpose of collecting funds to aid
needy boys and girls in securing an education or if the legacy in
question had been given as a foundation of a society thereafter to
be formed for that purpose and they had associated themselves in
accordance with the provisions of the will to receive the legacy,
no one would question but that in so doing they had formed a
charitable association or society. In that case their right to
receive a legacy for the purpose of their association would not be
taxable under the statute in question.
. . . .
We hold that under the provisions of this will the board of
trustees are a charitable society within the meaning of the
exemption clause of the statute, and that they are entitled to
receive the legacy . . . exempt from the inheritance tax.
Id. at 452-53, 92 A. at 968.
¶ 25. We recognize that Curtis was based, in part, on a liberal
construction of the statute to protect the charitable purpose of the
legacy. Id. at 450, 92 A. at 967. Here, we must narrowly construe the tax
exemption, and a broad construction of "society" is consistent with this
purpose. If the three trustees in Curtis are a society as decided in that
case, the seventeen trustees of OLEHOP are equally a society under the
broad definition of the term. (FN1)
¶ 26. In reaching our conclusion that OLEHOP is a religious society,
we are also influenced by an inability to ascertain a legislative intent
consistent with OLEHOP's definition of religious society. Under OLEHOP's
interpretation of the language, it is entitled to a property tax exemption
where a traditional church occupying the same space, with the same uses,
would not be entitled to the exemption. While we understand that OLEHOP
may operate differently from a traditional church, we discern no
differences that would affect tax exemption policy. Thus, in keeping with
the relatively broad terminology used in describing entitlement to some
exemption under § 3802(4), we conclude that we should broadly construe §
3832 to complement the entitlement language. See Experiment in Int'l
Living, Inc. v. Town of Brattleboro, 127 Vt. 41, 45, 238 A.2d 782, 785
(1968) ("[O]ur statutes relating to tax exemption must be construed as
parts of one system."), overruled on other grounds by Am. Museum of Fly
Fishing, Inc. v. Town of Manchester, 151 Vt. 103, 557 A.2d 900 (1989).
¶ 27. Although OLEHOP supports its definition in part with cases
from other jurisdictions, we find that the decisions support the conclusion
we have reached. Probably the most similar decision is Institute in Basic
Life Principles, Inc. v. Watersmeet Township, 551 N.W.2d 199, 204 (Mich.
Ct. App. 1996), in which the court found that an organization conducting
Biblical seminars was a "religious society" within the meaning of the
property tax exemption statute. The court defined religious society as an
organization whose "predominate purpose and practice include teaching
religious truths and beliefs," and concluded that the statute does not
require "religious society" to have members, noting in part that the
Nonprofit Corporation Act allows nonprofit corporations to be organized
without members. 551 N.W.2d at 203-04. The court reasoned:
[N]othing within [the statute] . . . requires that a religious
society have members. This narrow interpretation of the statute,
in reliance on out-of-state authority, precludes exemptions for
property owned by ecumenical religious societies, such as
petitioner, even though the property is used for teaching
religious beliefs and truths. The Tax Tribunal's definition
further excludes from exemption religious entities with only loose
affiliations with organized religions. Although petitioner may
not fall within the traditional definition of a religious society,
that does not mean that it is not entitled to an exemption as a
religious society under the house of public worship exemption.
Id. at 204.
¶ 28. In World Evangelistic Enterprise Corp. v. Tracy, a Christian
radio broadcast facility applied for tax exemption as a " 'house used
exclusively for public worship,' " arguing that its broadcast center was
used to encourage public worship. 644 N.E.2d 678, 680 (Ohio Ct. App. 1994)
(quoting Ohio Rev. Code Ann. § 5709.07(2)). In holding for the broadcast
corporation, the court invoked a constitutional provision against giving
preference to any religious society. In its opinion, the court noted that
the term "society" traditionally "involved a community of persons living
and worshiping together" and acknowledged that "[r]adio broadcasts of
religious programs do not constitute an institutionalized church, which is
the traditional form of religious society." Id. at 681. It concluded,
however, that "for purposes of the tax exemption concerned, the test does
not concern the form of a religious society but the fact of its existence."
Id. The court held that the statute
must accommodate a structure or facility that is used exclusively
or primarily to propagate a religious message to persons who
receive that message for a worshipful purpose. Those who engage
in that activity constitute a form of religious society, whether
they are gathered where the religious message originates or are
¶ 29. Just as in Watersmeet Township and Tracy, OLEHOP may not meet
the traditional concept of a religious society, but it meets a fair
definition of that term consistent with its purposes. As expressed in
Tracy, our concern is not whether its form is traditional, but whether it
exists. OLEHOP is an association of people that are united in their common
purpose of providing a place of prayer and worship and are motivated to do
so through their belief in God.
¶ 30. We turn now to OLEHOP's arguments that would increase the
share of its property found exempt. In this category, OLEHOP argues that
even if it is considered a religious society under the statute, the
superior court erroneously applied a quantum of use test to determine which
portion of plaintiff's property could be properly allocated as "pious." It
further argues that the court erred in not finding a greater portion of the
property exempt in light of the modifications made by OLEHOP since the 2001
adjudication. Before we examine these arguments, we must explain the
unusual procedural circumstances involved in this case.
¶ 31. Although OLEHOP's declaratory judgment action generally sought
a declaration that its property was exempt from property taxation, its
factual statement made it clear that the action was, in essence, an appeal
of the Town's 2002 assessment. OLEHOP itemized the changes in the
property's use as of the complaint's date of the filing, September 23,
2002. The case was heard almost a year later in August, 2003. The court's
judgment was simply "petition for declaratory judgment is denied," leaving
in place the 2002 assessment.
¶ 32. In its 2001 decision, the superior court evaluated OLEHOP's
use of each part of its property. Relying upon Governor Clinton Council,
Inc. v. Koslowski, 137 Vt. 240, 249, 403 A.2d 689, 695 (1979), the court
held that a use must be substantial to qualify for property tax exemption.
This holding was particularly challenging for OLEHOP because it was slowly
engaged in a process of converting property used for housing and riding
horses into its religious retreat. Thus, of the structures on the
property, the court found that only a portion of the main barn was used for
pious purposes consistent with § 3832. Apparently with agreement of the
parties, the court chose to divide the value of the barn building, allowing
an exemption for the percentage of the barn actually being used for uses
exempt under § 3832(2). It found the authority to divide the value of a
building in Medical Center Hospital v. City of Burlington, 131 Vt. 196,
199, 303 A.2d 468, 470-71 (1973). (FN2)
¶ 33. Although OLEHOP's complaint did not state so, it made clear
at the bench trial that it wanted to revisit the 2001 allocation decision
in light of the property's new construction if it did not prevail on its
argument that the entire property was tax exempt. Neither OLEHOP nor the
Town sought to revisit the court's approach of dividing the value of the
¶ 34. The issues presented to the court caused uncertainty about the
proper procedure. Relying on our precedent that a property owner claiming
a property tax exemption could bypass the assessment appeal procedure and
bring a declaratory judgment action, see Subud of Woodstock, Inc. v. Town
of Barnard, 169 Vt. 582, 583, 732 A.2d 749, 750 (1999) (mem.); Gifford
Mem'l Hosp. v. Town of Randolph, 119 Vt. 66, 70, 118 A.2d 480, 483 (1955),
OLEHOP insisted that its challenge was a declaratory judgment action only.
This position was of little consequence in OLEHOP's action for declaratory
judgment in response to the 2001 listing because OLEHOP used the
administrative appeal process for that year and the declaratory judgment
action was filed in superior court within the time limit for an appeal.
There was a consequence in the declaratory judgment action to the 2002
listing, however, because OLEHOP, and then the Town, introduced evidence of
structural modifications, and use, without regard to when these occurred.
Eventually, the evidence moved into how the Town assessed the property in
2003, although some of OLEHOP's claims were not presented to the listers
even in 2003.
¶ 35. Our statutory scheme requires the listers to assess taxable
property as of April 1 for the ensuing year. 32 V.S.A. § 3651; Robtoy v.
City of Saint Albans, 132 Vt. 503, 505, 321 A.2d 45, 47 (1974). There is
no statutory authorization for a rebate if property becomes exempt from
taxation after that date but within the same tax year. Thus, under the
2001 holding, the question for OLEHOP and the Town was the value of the
property not exempt from taxation on each April 1, as OLEHOP continued its
modification of the buildings and the uses of the property. Under these
unique circumstances, each annual determination involves a combination of
exemption and assessment determinations. We conclude that to maintain the
integrity of the assessment and review process, specifically to give the
listers the opportunity to inspect and assess the property on the relevant
date, OLEHOP must first go through the assessment review process and then
use an appeal to contest that assessment decision, including the portion of
exempt property. See 32 V.S.A. §§ 4222 (grievance of lister's assessment),
4404 (appeal to board of civil authority), 4461 (appeal from board to
director or superior court). Indeed, if we do not authorize and require
use of this process, OLEHOP will have to file a declaratory judgment action
each year to arrive at an enforceable allocation for that year.
¶ 36. In this case, based on its complaint and proposed findings of
fact, OLEHOP contested only the 2002 tax assessment. Although evidence of
structural modifications and new uses after that date was introduced, we do
not believe that this evidence changed the fundamental nature of the case
from an appeal of the 2002 assessment. Therefore, we reach only questions
pertaining to facts presented at the time of the 2002 assessment.
¶ 37. We now reach OLEHOP's arguments that additional parts of its
property should be found exempt: (1) the second, larger, chapel in the
barn; (2) the new parking area created after part of the barn roof
collapsed; and (3) the apartments used for visiting clergy. We summarily
reject OLEHOP's arguments with respect to the first two items. Both were
constructed after April 1, 2002, and, thus, would not be considered in the
2002 tax assessment that was before the court.
¶ 38. We affirm the superior court's decision with respect to the
apartments. Mary Tarinelli testified that some of these rooms are reserved
for visiting clergy while others are open to the public. We agree with the
trial court and "cannot interpret § 3832(2) to cover as a 'parsonage' the
rooming units occasionally reserved for visiting clergy." A parsonage is
commonly defined as a residence for an ordained minister who is serving a
congregation's needs. Corp. of Presiding Bishop of Church of Jesus Christ
of Latter-Day Saints v. Ada County, 849 P.2d 83, 90 (Idaho 1993) (citing
cases); St. John's Evangelical Lutheran Church v. City of Bay City, 319 N.W.2d 378, 382 (Mich. Ct. App. 1982). OLEHOP's new apartments cannot be
construed as a parsonage because visiting clergy are not in residence on a
permanent basis and do not conduct pastoral duties or minister to a
¶ 39. Finally, we come to OLEHOP's argument that the court
improperly used a "quantum-of-use" test to determine whether particular
parts of the property were tax exempt. Plaintiff submits that once the
court determines an organization uses property primarily for pious
purposes, there should be no examination of the magnitude of that use.
OLEHOP alleges that the trial court engaged in an improper subjective
analysis of whether its activities were sufficiently pious, frequent or
substantial to qualify for tax exemption and that this analysis constituted
excessive entanglement in violation of First Amendment protections.
Specifically, OLEHOP argues that courts should not be arbiters of what uses
are sufficiently pious to qualify for the exemption.
¶ 40. OLEHOP did not raise this constitutional argument in the
trial court and we conclude that it was not preserved. In addition, we
note that the U.S. Supreme Court long ago affirmed states' ability to
provide property tax exemption for religious institutions. Walz v. Tax
Comm'n of N.Y., 397 U.S. 664, 676-77 (1970). In the past, we have rejected
the notion that simply because the court must decide whether an
organization fits within a statutorily defined exemption there is
necessarily entanglement. Chittenden v. Waterbury Ctr. Cmty. Church, 168
Vt. 478, 487, 726 A.2d 20, 26-27 (1998) ("[I]f a court's analysis and
decision-making constituted 'excessive government entanglement' then
religious institutions would never have recourse in court as to any dispute
in which their religious status was in issue."). Even under OLEHOP's
analysis, the court must determine the "primary use" of property to
determine if it is an exempt use. Inst. of Prof'l Practice, Inc. v. Town
of Berlin, 174 Vt. 535, 538, 811 A.2d 1238, 1242 (2002) (mem.). This
property-specific inquiry is mandated by § 3832(2), which does not provide
a blanket exemption for all property put to pious use, but instead limits
the exemption to property used for specific purposes.
¶ 41. OLEHOP's argument is based primarily on the superior court's
reliance on Governor Clinton Council, Inc., 137 Vt. at 249, 403 A.2d at
695, for the proposition that a use must be substantial to be considered
for purposes of determining exemption from property taxation. To the
extent the court employed a substantial use test, it was with respect to
the additional parking area and the second chapel, property modifications
not in place on April 1, 2002. Thus, even if OLEHOP had properly preserved
this argument, it was premature.
¶ 42. As we stated above, the court's judgment in this case was
"petition for declaratory judgment, DENIED." As we have explained the
scope of the action above, we conclude that the court's entry was correct.
FOR THE COURT:
FN1. A Board of Trustees list was presented to the trial court. It shows
seventeen people, but twelve entries, the difference reflecting the listing
of husband and wife at the same address in five entries. Even if there are
only twelve trustees, our conclusion would be the same.
FN2. In Medical Center Hospital, we held:
The critical question for determining whether property is entitled
to a charitable or public use exemption, under the provisions of
32 V.S.A. § 3802(4), is the use to which the property is put,-not
its ownership. It is the primary as distinguished from an
incidental use of the property that determines whether it is
exempt from taxation.
While the precise question has not, to our knowledge, been
heretofore presented to this Court, it has been held that where
property of a tax exempt institution is devoted partly to public
uses, a building may be divided, for the purpose of taxing that
part of it engaged in business use and exempt that part devoted to
public use. In the case of Chapman v. Draughons School of
Business, 287 P.2d 903 (Okl. 1955), it was held that when an
exempt entity uses nine floors of an eleven story building for
exempt purposes and leaves two floors for commercial use,
two-elevenths of the property's value is subject to taxes and
nine-elevenths is exempt.
131 Vt. at 199, 303 A.2d at 470-71 (citations omitted). The evidence was
not present to perform the allocation in Medical Center Hospital so we
could not perform the required analysis. None of our decisions since have
applied an analysis that allocates space within a building between exempt
and non-exempt. We do not decide whether such an allocation was
appropriate in this case because no party has contested the decision to
allocate the space in the large barn.