New Vrindaban Community v. Rose
Annotate this Case
January 1992 Term
___________
No. 20891
___________
NEW VRINDABAN COMMUNITY, INC.,
Petitioner Below
v.
HERSCHEL H. ROSE, AS WEST VIRGINIA
STATE TAX COMMISSIONER, AND
ALFRED CLARK, AS ASSESSOR OF
MARSHALL COUNTY, WEST VIRGINIA,
Respondents Below
___________________________________________________
Certified Question from the Circuit Court of Marshall County
Honorable Richard A. Warmuth, Judge
Civil Action No. 84-AP-2W
REMANDED
___________________________________________________
Submitted: April 28, 1992
Filed: July 1, 1992
G. Charles Hughes
Moundsville, West Virginia
Attorney for the Petitioner
Mario J. Palumbo
Silas B. Taylor
Jeffrey W. VanGilder
Timothy J. Lafon
Office of the Attorney General
Charleston, West Virginia
Attorneys for the Respondents
CHIEF JUSTICE McHUGH delivered the Opinion of the Court.
Justice Miller, deeming himself disqualified, did not participate
in the consideration or decision of this case.
SYLLABUS BY THE COURT
"The word 'shall,' in the absence of language in the
statute showing a contrary intent on the part of the legislature,
should be afforded a mandatory connotation." Syl. pt. 2, Terry v.
Sencindiver, 153 W. Va. 651, 171 S.E.2d 480 (1969).
Where a question of taxability arises under W. Va.
Code, 11-3-25 [1967], and such question involves the
constitutionality of a statute granting exemption from taxation,
the matter shall be heard de novo by the circuit court before this
Court will pass on the constitutionality of the statute granting
the exemption.
McHugh, Chief Justice:
In this certified question proceeding, the petitioner is
the New Vrindaban Community, Inc. (also referred to as the
"taxpayer"); the respondents are Herschel H. Rose, as West Virginia
State Tax Commissioner, and Alfred Clark, as assessor of Marshall
County (also referred to as the "State").See footnote 1
I
In 1984, the Marshall County Assessor sought the opinion
of the State Tax CommissionerSee footnote 2 regarding the tax exempt status, if
any, of 102.82 acres belonging to the taxpayer pursuant to the
religious exemption contained in W. Va. Code, 11-3-9 [1973, 1990],
discussed infra.
On February 28, 1984, the Commissioner, by written
opinion, ruled that the 102.82 acres at issue are not exempt under
W. Va. Code, 11-3-9 [1973, 1990].
As contained in the Commissioner's opinion, the property
at issue includes lodging buildings, a gift shop, a restaurant, and
the temple known as Prabhupada's Palace of Gold. The gift shop and
restaurant are involved in retail sales of items and food,
respectively. There is an admission fee charged for entrance to
the temple. It is also asserted that the taxpayer advertised on
brochures distributed at a country music festival for special rates
to see the palace. It is also asserted that the taxpayer generally
advertises heavily through brochures and billboards. The palace is
located within the same structure as the gift shop.
Pursuant to W. Va. Code, 11-3-25 [1967], which is also
discussed in more detail infra, the taxpayer appealed the
assessment to the Circuit Court of Marshall County. The parties
engaged in substantial discovery, although the matter was not heard
de novo by the circuit court. Rather, upon the taxpayer's motion
for summary judgment or declaratory judgment in September, 1989,
the circuit court certified a question to this Court, which, for
some reason, was never presented to this Court.
In May, 1991, a status conference was held wherein the
State requested a de novo hearing on the matter. The circuit court
instead recertified the question, which, in essence, asks: Whether
the ad valorem property taxation exemption provided by W. Va. Code,
11-3-9 [1973, 1990] violates the First Amendment to the United
States Constitution? The circuit court opined that it does so
violate.See footnote 3
In this opinion, though, we choose not to reach the
question certified by the circuit court because it is clear that
the factual circumstances of this case could be more developed in
that court, as required by W. Va. Code, 11-3-25 [1967], even before
the question, as certified to us, could be answered.See footnote 4
II
Article X, section 1 of the West Virginia Constitution
provides, in relevant part:
Subject to the exceptions in this section
contained, taxation shall be equal and uniform
throughout the State, and all property, both
real and personal, shall be taxed in
proportion to its value to be ascertained as
directed by law. No one species of property
from which a tax may be collected shall be
taxed higher than any other species of
property of equal value; . . . but property
used for educational, literary, scientific,
religious or charitable purposes, all
cemeteries, public property, the personal
property, including livestock, employed
exclusively in agriculture as above defined
and the products of agriculture so defined
while owned by the producers may by law be
exempted from taxation[.]
(emphasis supplied)
The legislature accepted this constitutional invitation
to exempt certain property from taxation by enacting W. Va. Code,
11-3-9 [1973, 1990].See footnote 5 That section provides, in relevant part:
All property, real and personal,
described in this section, and to the extent
herein limited, shall be exempt from taxation,
that is to say: . . . property used
exclusively for divine worship; parsonages,
and the household goods and furniture
pertaining thereto; mortgages, bonds and other
evidence of indebtedness in the hands of bona
fide owners and holders hereafter issued and
sold by churches and religious societies for
the purposes of securing money to be used in
the erection of church buildings used
exclusively for divine worship, or for the
purpose of paying indebtedness thereon[.]
Notwithstanding any other provisions of
this section, however, no language herein
shall be construed to exempt from taxation any
property owned by, or held in trust for,
educational, literary, scientific, religious
or other charitable corporations or
organizations, including any public or private
nonprofit foundation or corporation existing
for the support of any college or university
located in West Virginia, unless such
property, or the dividends, interest, rents or
royalties derived therefrom, is used primarily
and immediately for the purposes of such
corporations or organizations.
The tax commissioner shall, by issuance of regulations, provide each assessor with
guidelines to ensure uniform assessment
practices statewide to effect the intent of
this section.
In addition to the more general constitutional question
that has arisen concerning this statutory provision under the First
Amendment to the United States Constitution, factual questions are
presented by application of this statute, even conceding its
constitutional validity.See footnote 6 Primarily, the factual question that is
most likely to determine whether a taxpayer is granted a
"religious" exemption pursuant to W. Va. Code, 11-3-9 [1973, 1990]
is whether that taxpayer's property is "used exclusively for divine
worship."
Against this backdrop, however, is W. Va. Code, 11-3-25
[1967], which provides, in relevant part:
Any person claiming to be aggrieved by
any assessment in any land or personal
property book of any county who shall have
appeared and contested the valuation or whose
assessment has been raised by the county court
[county commission] above the assessment fixed
by the assessor, or who contested the
classification or taxability of his property
may, at any time up to thirty days after the
adjournment of the county court [county
commission], apply for relief to the circuit
court of the county in which such books are
made out; . . . If, however, . . . a question
of classification or taxability is presented,
the matter shall be heard de novo by the
circuit court. If, upon the hearing of such
appeal, it is determined that any property has
been valued at more than its true and actual
value, or illegally classified or assessed,
the circuit court shall, by an order entered
of record, correct the assessment, and fix the
property at its true and actual value.
(emphasis supplied)
As can be seen from W. Va. Code, 11-3-25 [1967], if a
question of taxability is involved, a de novo hearing is required
by the circuit court. This requirement is clear, as the statute
provides that "the matter shall be heard de novo by the circuit
court." (emphasis supplied)
"The word 'shall,' in the absence of language in the
statute showing a contrary intent on the part of the legislature,
should be afforded a mandatory connotation." Syl. pt. 2, Terry v.
Sencindiver, 153 W. Va. 651, 171 S.E.2d 480 (1969). Accord, syl.
pt. 5, Rogers v. Hechler, 176 W. Va. 713, 348 S.E.2d 299 (1986).
Prior to answering the certified question as it pertains
to the taxpayer in this case, it is not clear as to whether the
constitutional ramifications, if any, would even apply. This Court
has held: "Courts are not constituted for the purpose of making
advisory decrees or resolving academic disputes. The pleadings and
evidence must present a claim of legal right asserted by one party
and denied by the other before jurisdiction of a suit may be
taken." Mainella v. Board of Trustees, 126 W. Va. 183, 185-86, 27 S.E.2d 486, 487-88 (1943). Furthermore, "[i]t is a fundamental
rule of constitutional adjudication that constitutional questions
are avoided unless absolutely necessary." Harshbarger v. Gainer,
184 W. Va. 656, 660, 403 S.E.2d 399, 403 (1991).
There was no de novo hearing in this case, and the
taxpayer does not dispute this. Rather, the taxpayer asserts that
the fact that there has been no de novo hearing does not interfere
with this Court answering the certified question as presented.
We do not agree with the taxpayer's assertion in this
regard. Rather, we believe that it is unnecessary to address the
question of constitutionality at this point inasmuch as the matter
at hand has not been heard de novo by the circuit court as required
by W. Va. Code, 11-3-25 [1967]. The circuit court should have
conducted a de novo hearing in this case before certifying the
question on the constitutionality of W. Va. Code, 11-3-9 [1973,
1990]. As pointed out by the State, if the circuit court finds
that the taxpayer is not a religious entity, obviously, the First
Amendment analysis would have no application.See footnote 7
Accordingly, we hold that where a question of taxability
arises under W. Va. Code, 11-3-25 [1967], and such question
involves the constitutionality of a statute granting exemption from
taxation, the matter shall be heard de novo by the circuit court
before this Court will pass on the constitutionality of the statute
granting the exemption.
Therefore, this case is remanded to the Circuit Court of
Marshall County so that it may conduct a de novo hearing with
respect to whether the taxpayer in this case is exempt under the
provisions of W. Va. Code, 11-3-9 [1973, 1990].See footnote 8
Remanded.
Footnote: 1 Mr. Rose no longer serves as State Tax Commissioner.
Alan L. Mierke now serves as Acting State Tax Commissioner.
Footnote: 2 See W. Va. Code, 11-3-24a [1961].
Footnote: 3 The full text of the certified question is framed
thusly:
Whether the scope or sweep of the Religion Clauses of the First Amendment are implicated by the decision of the State Tax Commissioner that the subject property was not being used 'exclusively for divine worship' and therefore was not exempt from taxation under W. Va. Code, 11-3-9 [1973], specifically, whether the decision of the Commissioner on the question of 'taxability' serves either to directly or indirectly establish religion or to interfere with the free exercise thereof, given the purpose of the property tax exemption authorized by the
Constitution of this State, as implemented by
the W. Va. Code, and in the particular factual
circumstances posited here; as well as whether
the boundaries of separation between church
and state have been delineated with sufficient
clarity to avoid proscribed entanglements and
guarantee equal and uniform treatment and
protection under said Religion Clauses, both
generally and in the factual circumstances
posited here[.]
However, "upon receiving certified questions we retain some flexibility in determining how and to what extent they will be answered." City of Fairmont v. Retail, Wholesale, & Department Store Union, 166 W. Va. 1, 3-4, 283 S.E.2d 589, 590-91 (1980). Footnote: 4 In this Court's order granting review in this case, we "ordered that the parties brief, in addition to the issues fairly raised by the certified question, the issue regarding the right to a de novo hearing pursuant to W. Va. Code, 11-3-25." Footnote: 5 The 1973 version of W. Va. Code, 11-3-9 was in effect at the time of the assessment in this case. The 1990 amendment, which has no bearing on this case, merely added an exemption for property used for the public purpose of distribution of natural gas by a nonprofit corporation. Footnote: 6 The First Amendment to the United States Constitution provides: "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances." (emphasis supplied) The establishment and free exercise clauses of the First Amendment are made applicable to the states through the Fourteenth Amendment. See Cantwell v. Connecticut, 310 U.S. 296, 303, 60 S. Ct. 900, 903, 84 L. Ed. 1213, 1218 (1940). Footnote: 7 The taxpayer maintains that the key factual determinations have already been made in this case as evidenced by an "agreed" order between the parties. That order contained findings which, among other things, states that the taxpayer is exempt from federal income tax under § 501(c)(3) of the Internal Revenue Code, which grants a federal tax exemption for religious corporations and foundations. However, the State points out that it filed a motion to correct the order because it contained findings that were erroneously agreed upon by counsel for the State. The circuit court denied the State's motion to correct the order as well as its motion to compel discovery, but instead, certified the question in this case to this Court. It is disagreements such as these that reveal the need for a de novo hearing, and these matters should be resolved by the circuit court at that hearing. Footnote: 8 Usually we will answer the certified question as presented to us, or in similar terms. However, because, in granting review in this case, we pointed out that the lack of a de novo hearing may have some bearing herein, we remand this case on that issue. See note 4, supra.
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