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08/17/87 INDIANA ASSOCIATION SEVENTH-DAY ADVENTISTS

August 17, 1987.

INDIANA ASSOCIATION OF SEVENTH-DAY ADVENTISTS, PETITIONER,
v.
STATE BOARD OF TAX COMMISSIONERS, WILLIAM L. LONG, CHAIRMAN, GORDON E. MCINTYRE, MEMBER, DURWOOD S. STRANG, MEMBER, RESPONDENTS.



APPEAL FROM FINAL DETERMINATION OF THE STATE BOARD OF TAX COMMISSIONERS

Author: Fisher

FISHER, J.

STATEMENT OF THE CASE

This is an appeal from a final determination of the State Board of Tax Commissioners (Respondent) denying an exemption from real property taxes requested by the Petitioner for 1983. The exemption originally requested was for more property than is at issue here. Respondent granted the exemption to all of the property requested except as to one-half of a duplex residence. It is this denial that is at issue here. As to the half for which the exemption was denied, the assessed value was $6,885; an equal amount for the other half was allowed as exempt by the Respondent under IC 6-1.1-10-21. Petitioner has not challenged the amount of the assessed value, only the question of the exemption claim has been brought for court review.

STATEMENT OF FACTS

1. Petitioner is an Indiana not for profit corporation with approximately 71 churches.

2. This corporation owns churches, schools, parsonages, and other real property in Indiana, including that which is the subject of this action.

3. On May 10, 1983, Petitioner filed an application for a property tax exemption. It based its claim for the exemption on IC 6-1.1-10-16. The application claimed exemption for 15.7 acres together with the improvements located thereon. These improvements consisted of a church office building, which housed Petitioner's state headquarters, two storage garages, and a duplex. There is no evidence as to the action taken by the County Board of Review or the reasons for its action, but it is presumed that the application was denied on August 18, 1983. A petition to Respondent for review of the exemption was then filed by Petitioner. Thereafter on September 26, 1983, the Respondent held a hearing on the petition. The hearing was not recorded, and the Petitioner kept no notes of the hearing. The hearing officer discarded his notes after he filed his report, so the only written evidence of the hearing is the report filed by the hearing officer. Both the Petitioner's treasurer, Mr. Massengill, and the hearing officer testified from memory as to what evidence was presented at the hearing.

The Respondent allowed the claimed exemption for the church office and storage buildings pursuant to IC 6-1.1-10-16 and one-half of the duplex pursuant to IC 6-1.1-10-21. It denied one-half of the duplex because it did not conform to the requirements of IC 6-1.1-10-21. The Petitioner appeals the denial. As this appeal only concerns the nonexempted portion of the duplex except as used in P5 infra, reference hereafter to the term duplex is intended only to refer to that portion of the duplex for which the exemption was denied.

4. The duplex is used primarily to house ministerial employees of Petitioner's Indiana conference, particularly in the local area or for office ministerial departmental staff. Mr. Massengill testified that they are pastoral or licensed ministers, who would be assigned within a 20 or 25 mile radius, where there are 6 or 7 churches.

5. Most of the time both sides of the parsonage duplex were occupied by ordained ministers of the Church. To become an ordained minister, the minister must work at least three (3) years in a type of internship program within the Church's organization. These interns are sometimes housed in the duplex.

6. An "ordained" minister as defined by the doctrines and principals of the Indiana Association of Seventh-Day Adventists Church means a person who is able to perform religious functions, such as baptisms, marriages, and other sacraments of the Seventh-Day Adventists Church.

7. The Seventh-Day Adventists allow a non-ordained minister to reside in the duplex only if an emergency exists.

8. The duplex has been used to house teaching ministers only on a short term basis until the teaching minister can find housing for himself and his family. Such teaching ministers have to be trained in the doctrines and beliefs of the Seventh-Day Adventists to be able to teach in their church schools.

9. Sometimes the duplex is vacant and there is no specific contract or lease agreement for occupancy. No rents are accepted for its use.

10. Petitioner's witness did not recall who was living in the duplex on March 1, 1983, or at other times that year. He did not remember whether he testified at the hearing that the person living there was a teacher.

11. Petitioner's witness also could not recall who lived in the duplex on the assessment date without looking at his records. He had not looked at those records prior to trial and did not bring the records to the trial.

12. The duplex is not a permanent house "like . . . normal parsonages" but is "more of a transit housing arrangement."

13. Sometimes the persons who live in this duplex work at the church headquarters office, but no one can live there who ...


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