Dekalb County Board of Tax Assessors v. Presbytery of Greater Atlanta, Inc.

• Court: Court of Appeals of Georgia
• Decided: March 12, 2013
• Docket: A12A2321
• Status: Published

Opinion

FOURTH DIVISION DOYLE, P. J., ANDREWS, P. J., and BOGGS, J.

NOTICE: Motions for reconsideration must be physically received in our clerk’s office within ten days of the date of decision to be deemed timely filed. (Court of Appeals Rule 4 (b) and Rule 37 (b), February 21, 2008) http://www.gaappeals.us/rules/

March 12, 2013

In the Court of Appeals of Georgia A12A2321. DeKALB COUNTY BOARD OF TAX ASSESSORS v. PRESBYTERY OF GREATER ATLANTA, INC.

BOGGS, Judge.

The trial court wrote an excellent, thorough, complete, and correct order in

granting appellee’s motion for summary judgment.1 We adopt the trial court’s order,

set out below in full, verbatim, as our opinion in this case.2

FINAL ORDER

“Appellant’s Motion for Summary Judgment and Appellee’s cross Motion for

Summary Judgment having come before the Court for hearing on May 9, 2012, after

1 As it did below, the Board erroneously relies upon cases construing OCGA § 48-5-41 (a) (4), pertaining to “institutions of purely public charity.” This case involves OCGA § 48-5-41 (a) (2.1) (A), “all places of religious worship,” and the trial court correctly applied the relevant law. 2 See Kordares v. Gwinnett County, 220 Ga. App. 848 (470 SE2d 479) (1996). review of the record and hearing argument from the parties, the Court enters the

following Order:

FINDINGS OF FACT

“Appellee is a Georgia non-profit corporation recognized as a bona fide tax

exempt religious non-profit organization by the Internal Revenue Service. Appellee

is the district-level governing body of the Presbyterian Church (U.S.A.) (‘PCUSA’),

a national religious denomination. In 2010, when the Midway Presbyterian Church

became defunct, the Appellee took ownership of the Midway Presbyterian Church

property (‘Property’) in accordance with the Constitution of the PCUSA. It is the tax

exempt status of the Property that is at issue in this case.

“The tax parcel number of the Property is 15 199 17 003 and the Property is

commonly referred to as 3363 Midway Road, Decatur, DeKalb County, Georgia. A

portion of the property contains a cemetery, which the parties agree is tax exempt. It

is the remainder of the Property that Appellant claims is not tax exempt.

“Upon assuming ownership of the Property, Appellee attempted to sell the

Property but was unable to find a ready, willing and able buyer. Faced with the

obligations of maintenance, upkeep and other expenses associated with ownership of

the property, Appellee leased the Property to Kingdom Fellowship Christian Church,

2 Inc. (‘Kingdom Fellowship’) to defray the costs of ownership and to prevent the

Property from sitting vacant. Kingdom Fellowship is recognized as a bona fide tax

exempt religious non-profit corporation by the Internal Revenue Service. Kingdom

Fellowship uses the Property as a place of religious worship. All other use of the

Property by Kingdom Fellowship, such as religious instruction classes, meetings

related to church business, and community outreach for the church, is all integral to

the use of the Property as a place of religious worship.

“Under the lease agreement between Appellee and Kingdom Fellowship, the

monthly rent payable by Kingdom Fellowship was $1,000.00 per month for the year

2011. The 2011 market rental rate for the Property was approximately $5,000.00 per

month, exclusive of utilities and costs. Appellee does not realize a profit from the

lease of the Property to Kingdom Fellowship.

“In 2011, Appellant withdrew the ad valorem tax exemption that had

previously been granted on the Property. Appellee challenged the withdrawal of the

exemption and the Board of Equalization found in favor of Appellee, concluding that

the Property in its entirety is tax exempt. Appellant appealed the Board of

Equalization decision to this Court.

3 CONCLUSIONS OF LAW

“The issue in this case is whether the non-cemetery portion of the Property

qualifies for a tax exemption. O.C.G.A. § 48-5-4 l (a) (2.1) (A) provides that ‘all

places of religious worship’ shall be exempt from all ad valorem Property taxes. It is

undisputed that the Property is a place of religious worship, thus, the Property must

be tax exempt unless some other provision of law specifically removes the Property

from the tax exemption. Appellant argues that the Property is not tax exempt because

the owner, Appellee, does not personally use the Property for religious worship;

however, this Court finds no statutory requirement that the owner be the user of the

property when dealing with a ‘place of religious worship’ tax exemption.

“It is the use of the property that governs the analysis of religious worship tax

exemptions. The Georgia Court of Appeals resolved this issue in favor of granting the

exemption in a case with facts that are materially indistinguishable from the facts of

the case under consideration. In Pickens County Bd. of Tax Assessors v. Atlanta

Baptist Assoc., Inc., 191 Ga. App. 260 [(381 SE2d 419)] (1989), the Atlanta Baptist

Association owned property upon which the Association itself did not worship but

it rented the property out to adult and youth church groups of various denominations

each of which conducted a religious worship program during their stay on the

4 property. Focusing on the use of the property rather than the ownership of the

property, the Court of Appeals concluded that the property was tax exempt as a matter

of law under the religious worship exemption.

“Under O.C.G.A. § 48-5-41 (a) (2.1) (A) and Pickens, the Court concludes that

the Property is tax exempt as a place of religious worship. This decision is consistent

with the long-standing public policy of the State of Georgia to ‘encourage and

advance religion.’ The Trustees of the First Methodist Episcopal Church, South v.

The City of Atlanta, 76 Ga. 181, [191] (1886). The Court does not find merit in

Appellant’s argument that the Property is not entitled to tax exempt status because the

Property is leased to another entity. O.C.G.A. § 48-5-41 (d) (1) provides that

otherwise tax exempt property may become subject to taxation if it is rented, leased

or otherwise used ‘for the primary purpose of securing an income thereon. . .’ The

record reflects that no profit is realized from the lease to Kingdom Fellowship. (Kelly

Aff. ¶9). This is not a case of a for-profit landlord leasing space to a church

organization for profit. Rather, the uncontested facts show a religious non-profit

corporation leasing the Property to another religious non-profit corporation at

approximately 20% of the market rental rate without realizing a profit; thus, the Court

5 concludes the ‘primary purpose’ of the lease is not to secure an income on the

property.

“Having decided that the Property is tax exempt under O.C.G.A. § 48-5-41 (a)

(2.1) (A) and Pickens, the Court need not address Appellee’s alternative theory of tax

exemption under O.C.G.A. [§] 48-5-41 (a) (2.1) (B).

“Appellant’s Motion for Summary Judgment is hereby DENIED. Appellee’s

cross Motion for Summary Judgment is hereby GRANTED. [Trial court order ends.]”

Judgment affirmed. Doyle, P. J. and Andrews, P. J., concur.