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BEFORE THE STATE TAX APPEAL BOARD OF THE STATE OF MONTANA
THE STAG SOCIETY, Appellant, -vs- THE DEPARTMENT OF REVENUE OF THE STATE OF MONTANA,
Respondent.
DOCKET NO.: SPT-2000-1
FACTUAL BACKGROUND, CONCLUSIONS OF LAW, ORDER and OPPORTUNITY
FOR JUDICIAL REVIEW
[1] The above-entitled appeal was heard on September 14,
2000, in the City of Thompson Falls, Montana, in accordance
with an order of the State Tax Appeal Board of the State
of Montana (the Board). The notice of the hearing was duly
given as required by law.
[2] The taxpayer, The Stag Society, represented by Stevens
Lawrence; Hart, Overseer, and Mary Ann; Hart, Scribe, presented
testimony in support of the appeal. The Department of Revenue
(DOR), represented by Appraisal Specialist Virgil Byford,
presented testimony in opposition to the appeal. Testimony
was presented, exhibits were received, and a schedule for
post-hearing submissions was established. The duty of this
Board is to determine whether the property qualifies for
an exemption, based on a preponderance of the evidence. The
Stag Society is the appellant in this proceeding and, therefore,
has the burden of proof. Based on the evidence and testimony,
the Board finds that the decision of the Department of Revenue
is affirmed.
STATEMENT OF ISSUE
[3] The issue before this Board is to determine if the subject
property qualifies for tax-exempt status.
[4] FACTUAL BACKGROUND
1. Due, proper and sufficient notice was given of this matter,
the hearing hereon, and of the time and place of the hearing.
All parties were afforded opportunity to present evidence,
oral and documentary.
2. The taxpayer is the owner of the property which is the
subject of this appeal and which is described as follows:
The East 820 Feet of Lot Six in Section 1, Township 18 North,
Range 25 West; approximately 13.83 acres of land and the
two cabins thereon; Sanders County, State of Montana. (Assessor
number 14193; geo-code number 35-2747-01-4-01-01-100M.)
3. On February 23, 1999, the taxpayer applied for a religious
exemption for the subject property. (Application #3500499.)
The letter accompanying the application form states, in pertinent
part:
The subject property qualifies for a property tax exemption
because the owner is a corporation sole which has been properly
organized and recognized.
Pursuant to the laws of Montana at 15-6-201(b) and 15-6- 201(d)(i) and Title
35 Chapter 3, a corporation sole's property is exempt.
4. On April 28, 1999, a form letter requesting further information was sent
to the taxpayer from Virgil F. Byford, Appraisal Specialist, Compliance, Valuation
and Resolution Office, Montana Department of Revenue. The information requested,
which was to be submitted within thirty days, is as follows:
Proof that occupant of the parsonage is a member of the
clergy (if this is a parsonage). Articles of Incorporation:
(If incorporated). I received a copy of your Certificate
of Existence with the application.
Constitution and By-Laws: (If not incorporated).
A letter explaining how your organization specifically uses the real property
to be considered. Is the building used for: a) a parsonage, b) religious worship
services (if so, when are they held and how many members do you have), or c)
other purposes (please describe in detail)?
5. Stevens Lawrence; Hart, Overseer, The Stag Society, responded to Mr. Byford's
letter on May 18, 1999, stating, in pertinent part:
I think there is a degree of misunderstanding regarding
our church, which may have been the result of my not having
more fully explained it. So I will attempt to rectify this
oversight and answer your questions to the best of my ability.
First of all, the "The Office of the Presiding Patriarch (Overseer), and
his successors, a corporation sole over/ for an unincorporated religious Scriptural
society in the nature of Ecclesia, the Stag Society" is not a government
created or government sponsored organization as described in the Internal Revenue
Code at 501(c)(3), and therefore the government of Montana, pursuant to the
Constitutions for America and Montana have no authority to inquire into the
methods, practice, conduct or financial affairs of the church. However, as
we are commanded in Scriptures, we will cooperate to the greatest extent possible
with your inquiries.
To that end, enclosed, you will find a copy of the Instrument of Acknowledgment
as filed with the Secretary of State in Nevada, pursuant to law, both Canon
and statutory. This filing provides conclusive evidence of proof for your questions
number 1, number 2 and number 3.
Regarding question number 4, it is the position of the assembly and of myself,
as the Overseer (corporation sole), that . . . the specific activities of the
church and how we practice our religion, lie carefully protected from the prying
eyes of government behind the 1 st amendment to the American Constitution: "Congress
shall make NO LAW respecting an establishment of religion, or prohibiting the
free exercise thereof; or abridging the freedom of speech, . . ." . .
. we will also inform you that the land and its buildings are going to be devoted
exclusively to doing God's work, in the best understanding that we can acquire
. . ."
6. After receiving Mr. Hart's response, Mr. Byford requested the Sanders County
Appraiser, Edward Thompson, to physically inspect the subject property. Mr.
Thompson sent The Stag Society a letter dated August 9, 1999, requesting that
Mr. Hart contact his office to schedule an appointment for the physical inspection.
7. The taxpayer responded to Mr. Thompson's request by a
letter dated August 29, 1999, which states, in pertinent
part:
. . . I wish to emphasize the constitutional and statutory
nature of our Church. This Church is organized under the
laws and precepts of a religion which goes back to at least
the giving of the law to our Patriarch Moses on Mount Sinai,
nearly 3500 years ago . . .
Please feel free to correct us if we are mistaken in our belief that the Constitution
and more than 200 years of American law clearly and unequivocally uphold the
complete separation of State control of Church affairs. Since our Church is
not organized as a tax exempt corporation under section 501(c)(3) of the Internal
Revenue Code, and further since our Church is not organized under the laws
of any state, but was organized according to principals set forth since antiquity
and such organization was duly recognized by the State of Nevada, and since
the full faith and credit clause of the American Constitution guarantees that
such recognition will be recognized by the State of Montana, we fail to understand
why you feel inclined to "inspect" or "determine some facts
concerning" our church, its property, personnel or activities.
It is our opinion, but please feel free to correct us if we are wrong, that
church activities, gatherings, personnel and property are all fully protected
from inspections or determinations of fitness by the state. As we've stated,
if we are wrong, by all means please let us know and give us knowledge of what
law or laws we would be in violation of if we denied you access to our Church
for any purpose other than for worship . . .
8. Mr. Thompson forwarded to Mr. Byford a copy of Mr. Hart's August 29th letter;
and on October 14, 1999, Mr. Byford responded to Mr. Hart by letter that states,
in pertinent part:
In order for property owned by a church to qualify for a
property tax exemption in Montana, it must meet the requirements
of Montana law under 15-6-201(1)(b), MCA. This statute states: "buildings,
with land that they occupy and furnishings in the buildings,
that are owned by a church and used for actual religious
worship or for residences of the clergy, together with adjacent
land reasonably necessary for convenient use of the buildings;"
This means that the property of a church must meet an ownership test and a
use test in order to qualify for an exemption. Therefore, to obtain an exemption
the local appraiser must conduct a physical inspection of the property to determine
if it meets this use test. If the property is used for a parsonage, proof must
be provided that the occupant of the house is a member of the clergy as required
in the above listed statute.
In addition, the Montana Courts have ruled that the only portion of a property
owned by a church that is entitled to an exemption is the building used for
religious worship, a reasonable area around the church building for lawn, a
parking lot, and, if needed, a 30 foot roadway across the lot for access. For
the parsonage, only enough land for use of the building is entitled to an exemption
(usually .5 to 1.00 acre in size). For these reasons, a physical inspection
of the property by the appraiser is required to determine how much of the land
meets the use test.
If you are applying for exemption of a parsonage, I still need proof that the
occupant is a member of the clergy, as well as an indication of how many members
are in your church and attend church services at this location. Also, the local
appraiser, Mr. Edward R. Thompson, still needs to make a physical inspection
of the property.
I hope this letter addresses your concerns. However, if you fail to provide
the requested information and you refuse to allow us to physically inspect
the property, we will have no choice but to deny your request for a property
tax exemption on this property.
9. Mr. Hart responded to Mr. Byford's October 14th letter by letter dated October
27, 1999 and received by Mr. Byford on December 14, 1999. In pertinent part,
the letter states:
. . . In your letter you state that in order to qualify
for the property tax exemption that a church must meet an
ownership test. Is it by some manner contested at this point
that the church does not own the subject property? We purchased
it in our church name did we not? We have provided you with
the documents which prove our existence and organization
which were filed pursuant to the Nevada Revised Statutes,
have we not? I fail to understand why you wish to perform
an "ownership test." Can you kindly clarify this
point for me?
Your October 14th letter also states that the church must undergo a "use
test." You or your appraiser are welcome to come and visit us; and by
this letter you are officially noticed that I and my wife are the occupants
of said property and that I hereby state truthfully, and without deceit of
any nature, that this property is used for church purposes and ONLY church
purposes. Your letter of October 14th goes on to state that the appraiser needs "proof" that
I am a member of the clergy: well sir, I am the Overseer of this Corporation
sole and no further proof, other than the copies of paperwork you already have,
is either needed or capable of being legally demanded. As to how many members
our church has, or who does or does not attend church services: this information
is not something which we chose (sic) to disclose to anyone, and our right
to chose (sic) to not disclose such information is fully protected by the Constitution
for the United States of America and the constitution for Montana. You, however,
may rest assured that since the property, both the land and the appurtenances
thereto are, as I stated above, used for church purposes and ONLY for church
purposes, that the people who come here also come here for church purposes.
The only business I conduct here is church business, therefore people who come
here by definition are here on church business . . .
10. On January 20, 2000, Mr. Byford answered the taxpayer's letter of October
27, 1999, stating, in pertinent part:
. . . The Sanders County Appraiser, Mr. Edward R. Thompson,
will be contacting you in order to conduct a physical inspection
of the property. The reference in my letter to the ownership
test that Churches must meet in order to qualify for an exemption
was meant to illustrate what the exemption statute requires
in order for a Church to qualify for an exemption. At this
time we are not contesting the ownership of the property
and I did not ask for any further proof of ownership for
the property.
What I was attempting to obtain in my letter was some information about the
use of the property. This is required because the property of a church must
meet a use test in order to qualify for an exemption. There are only two uses
of Church property that will qualify it for a property tax exemption under
Montana statute. The buildings must be is (sic) used for a parsonage (residence
of the clergy) or for actual religious worship in order to qualify for the
exemption. Then the Church is allowed the amount of land that is "reasonably
necessary for convenient use of the buildings." The use of the property
for "church purposes and ONLY church purposes", as you state in your
letter, does not qualify the property for an exemption if the uses are not
the two uses required by Montana law and which I have indicated in this letter.
The inspection of the property by the appraiser is needed to verify if these
are the uses of the property and to determine how much land is necessary for
the use of the buildings.
Therefore, I still need the following information:
1. Which building on the property is used for "religious worship"?
I still need to know how many members are in your Church, how often you hold
worship services, and how many members usually attend these services in order
to determine if the property qualifies for exemption under this use requirement.
I am not asking for a list of your members. If you chose (sic) not to provide
me this information then I will not be able to make a determination as to whether
the property meets the statutory requirements for exemption and I will have
no choice but to deny your request for an exemption.
2. If you are claiming that the building on the property that you and your
wife occupy is used for a parsonage, please indicate which building this is.
You indicated in your letter that you are the Overseer of the Corporation,
how does this make you a member of the clergy? Most Church clergy members provide
a Certificate of Ordination. However, if your Church does not issue Certificates
of Ordination, please indicate how you are designated a member of the clergy
or Overseer. 3. If you refuse or fail to answer the above questions or
provide the information I have requested within 30 days, I will have no choice
but to deny your request for exemption.
11. In a letter dated January 25, 2000, Sanders County Appraiser Edward Thompson
asked the taxpayer to contact the appraisal office to arrange a convenient
time to conduct a physical inspection of the subject property.
12. On February 17, 2000, the taxpayer responded to Mr. Byford's letter of
January 20th. This three-page letter, which was received by Mr. Byford on February
29th, stated, in pertinent part:
. . . In your letter you state that in order to qualify for the property tax
exemption, that a church must meet an ownership test . . . we cannot understand
why your department continues to insist on claiming that a real church comes
under some inferior statute of the corporate state of Montana. What is it about
the United States Constitution and the United States Supreme Court which you
do not understand? These references are to the Supreme Law Of The Land . Is
there some confusion about the words "supreme law of the land?" Is
there some doubt in your department as to whether the US Constitution is the
supreme law of the land? . . .
Way back in 1803, the United States Supreme Court was called upon to decide
if state law or a state constitution was superior to or inferior to the united
States Constitution. In the landmark case, Marbury vs Madison, chief justice
Marshall, speaking for the whole court, stated that the US Constitution was
the supreme law of the land. This case has been challenged more than 150 times
in every conceivable manner during the intervening 197 years. Each and every
time it has been upheld - it has never been overturned. By having challenged
it so many times in so many different ways, it is now simply not possible to
infer that the US Constitution is anything other than the supreme law of the
land . . .
. . . the Internal Revenue Code, is written, as you know, to be specific about
tax matters. It is written to specifically exclude the IRS and other Federal
government functionaries from being controlling with regards to churches. The
state of Montana, and by succession, the Montana Department of Revenue is bound
by law to follow in the footsteps already laid down. I suspect that you, like
so many other Americans today, are woefully under informed as to the difference
between a real church and a tax exempt organization. The latter is, regardless
of its possible name as a "church," just a mere corporation which
has been created by, and granted an exemption from taxation by the government;
the former, on the other hand, is an organization which owes not one whit of
its existence to the government, be it Federal or state or local; it owes its
existence and allegiance to Our Father in Heaven, and no other. A real church
is, according the words in the Internal Revenue Code, "MANDATORILY EXEMPT" from
filing or reporting on its activities. This wording is carefully chosen by
Congress, because, as Justice Marshall declared: the Constitution is the supreme
law of the land, and no one is entitled to make a law respecting the establishment
or practice of religion. not even the great state of Montana!
. . . should an organization which is "mandatorily exempt," file
or report voluntarily, then it is telling the government that it really isn't
a church, but just a mere tax exempt organization, and therefore subject to
the authority and control of the government. The reason the mandatory exception
to reporting on its activities is extended to the Internal Revenue Code by
the United States Congress, is that a church is fully and unconditionally protected
from scrutiny under the protections afforded it by the United States Constitution.
Not you, Mr. Byford, not the Montana Department of Revenue, and not the State
of Montana have the power or authority to impose conditions on the existence
or operation of our church. The United States Constitution says that,".
no law respecting an establishment of religion, or prohibiting the free exercise
thereof." Is there some confusion about the words, "no law?" I
respectfully point out that no law, means in fact no law at all.
I also suspect that you may be laboring under the mistaken belief that this
church is "subject to" or "subservient to" the statutory
authority under which most other so-called churches (i.e., 501(c)(3) tax exempt
corporations) are required to conform. We applied for an exemption from property
taxation in good faith, believing that our religious beliefs and our religious
worship and our very religion was exempt. You, on the other hand, in what we
are coming to believe is not in good faith, keep insisting that some vague
statutory authority which you refuse to provide, or some casual reference to
some court case which you also refuse to provide, give you an authority superior
to the Constitution of Montana, superior to the Constitution of the United
States and superior to the authority of Our Heavenly Father . . .
If you can show us a law which comports with the Constitutions, if you can
show us an authority superior to those instruments, we will duly consider it
with reverence and immediacy. If you cannot, or if you do not within the next
30 days, we will consider your silence as your positive acceptance of our position
that our church is entitled to a complete property tax exemption.
As we stated in our previous letter, "If we can agree on what the actual
definition of "use test" is and what criteria the state is looking
for us to meet, then I'm sure that agreement on the rest of the issue will
be easily and quickly reached." Once again, you have failed to provide
even a small clue of what a "use test" is. As we stated in that previous
letter, our membership is not something we disclose to anyone and our refusal
to disclose is fully protected by law: your opinion to the contrary notwithstanding.
Your letter of January 20th does, finally, disclose the true nature of this
inquiry. . . . you write: "as to whether the property meets the statutory
requirements for exemption." You admit thereby that this inquiry is based
on your attempts to obey and abide by the statutes. All statutes are required
to be written to be in absolute conformity with the Constitution and any which
are not are void of law. Since I am quite sure that both of us are law abiding
men, I know now that you will agree that the statute you refer to (but do not
provide) simply cannot be applicable to our church. 13. On March 14,
2000, Mr. Byford issued a letter to the taxpayer denying the exemption, for
the reason that "applicant did not supply the information requested in
the letters of 4/ 28/ 99, 10/ 14/ 99 and 1/ 20/ 2000."
14. On April 7, 2000, the taxpayer appealed the Department
of Revenue's decision to the State Tax Appeal Board. The
letter, which summarizes the issues discussed in previous
correspondence between the taxpayer and Mr. Byford, was received
by the Board on April 17, 2000. In pertinent part, the appeal
letter states:
. . . The Church applied for a property tax exemption on
or about 2-25-1999. The Department of Revenue asked for specific
information. All information required was supplied timely.
The Department of Revenue continued to ask for information
which is not required to be supplied by a church recognized
in the IRC at section 508 and which is specifically, "Mandatorily
exempt" from numbering and recognition under 510 (sic)
(c)(3) of the tax code. In addition, supplying such information
as was additionally requested by the Department of Revenue
(DOR) under alleged statutory authority is in opposition
to the Constitution for the united States of America and
the Constitution for Montana . . .
The State of Montana, DOR policy notwithstanding, does not have the authority
to insist that our, or any Church recognized in the eyes of God, . . . must
conform to certain state derived criteria before it can be recognized by the
state as a church, "Congress shall make no law respecting an establishment
of religion, or prohibiting the free exercise thereof.", the very first
words of the Bill Of Rights. The very idea that our, or any real Church, must
conform to any arbitrary criteria set forth in a "use test" before
being "deemed worthy" of being granted that which is God's to begin
with, is simply and completely repugnant to both the law of Our Heavenly Father
and that of our state and national Constitutions . . . We respectfully
request that this board recognize that we are a Church, albeit one NOT "created" by
corporate charter from the State of Montana, and that as is recognized by the
IRC at section 508, we are fully entitled to the property tax exemption we
requested.
15. On May 18, 2000, Mr. Byford submitted to the Board a response to The Stag
Society's appeal, in which he requests that the Board uphold the DOR's denial
of the exemption. The letter summarizes the communications between the parties
to date, and explains that the exemption had been denied because:
"Mr. Hart has continually refused to provide the following
requested information:
1. Which of the cabins is occupied by a member of the clergy and what qualifies
that occupant as a member of the clergy. Instead he says that he is the Overseer
of the church and does not explain how this makes him a member of the clergy,
i. e. was he ordained by his church and therefore, given a Certificate of Ordination,
does he conduct weddings, funerals, or perform other ministerial duties, etc..
2. Which of the cabins is used for "actual religious worship." An
indication of how many members the church has, whether any of these members
attend worship services on this property, and how often, where, and when these
services take place would be an indication of whether or not one of these buildings
is entitled to an exemption.
16. On June 4, 2000, the taxpayer submitted a six-page letter to the Board
in response to Mr. Byford's letter of May 18th. This letter, entitled "Affidavit
as Evidence in Case Docket Number SPT- 2000-1," is presented in its entirety
as part of Taxpayer's Exhibit 1 in the following section of this decision.
17. A post-hearing brief was submitted to the Board by the
DOR on October 13, 2000.
18. A request for an extension of time to respond was filed
by the taxpayer on November 13, 2000, and the motion was
granted by the Board.
19. The taxpayer's response to the DOR's brief was received
by the Board on November 27, 2000.
TAXPAYER'S CONTENTIONS
[5] Taxpayer's Exhibit 1 is a 34-page document containing
copies of the property tax exemption form, corporate documents,
correspondence between the taxpayer and the Department of
Revenue (as previously summarized in the Factual Background
of this decision), and the six-page "Affidavit" referred
to above (Factual Background, #16). The affidavit, which
contains a summary of the taxpayer's argument, was notarized
by a Jefferson County, Oregon, Notary Public on June 14,
2000, and is reprinted as follows:
[6] AFFIDAVIT AS EVIDENCE IN CASE DOCKET NUMBER SPT-2000-1
Dear Mr. Thornquist and members of the Appeal Board:
Response to Letter from Mr. Virgil F. Byford, Appraisal Specialist to this
Board. In an attempt to clarify and speed up the review and appeal process,
The Stag Society's Overseer, Mr. Stevens Lawrence; Hart, hereinafter, Mr.
Hart, would propose that a brief stipulation to certain facts is in order.
Since the letter submitted to you by Mr. Byford and the notice of appeal
letter submitted by myself contain certain material facts, I suggest that
it be recommend (sic) that the parties stipulate to these facts as set forth
below, so that this honorable board can focus on the real issue in contention
herein.
If all parties agree, in writing, to the below, the following material facts
can be stipulated as to their relevancy, and accuracy. If opposing parties
agree, this letter may be taken as written acceptance of said stipulated facts
by myself, Mr. Hart as Overseer of the Church.
Proposed Stipulated FACTS:
1. The Stag Society applied for an exemption, as the records of Sanders County
show, on or about February 23, 1999.
2. The Stag Society owns, by virtue of certain purchase documents and the deed
issued as a result thereof, all of which are a matter of public record in the
records of Sanders County Montana, hereinafter the subject property, to wit:
the East 620 Feet of Lot Six in Section 1, Township 18 North Range 25 West
consisting of approximately 13.83 acres all within the County of Sanders, and
associated buildings and other appurtenances; see page 1, 3, 2 nd sentence,
1 clause therein of the letter submitted tost this board by Mr. Byford, dated
May 18, 2000.
3. The Stag Society is a Church organized pursuant to the Holy Scriptures,
subservient to the Laws of the Creator of the Universe whose office, "The
office of the Presiding Patriarch (Overseer) and his successors, a corporation
sole over/ for an unincorporated religious Scriptural society, in the nature
of Ecclesia, The Stag Society" has been duly recognized pursuant to the
law of the State of Nevada as evidenced by documents submitted to Mr. Byford's
office; see page 1, 4, 2 nd sentence, 1 clause therein, of Mr.st Byford's letter
to this board dated May 18, 2000.
4. Without regard as to the specifics, Mr. Hart in his capacity as overseer
of the Church, supplied certain information to Mr. Byford and his office, all
of which was relevant and accepted by Mr. Byford.
5. Without regard to the specifics, Mr. Byford or his superiors in the Montana
Department of Revenue felt or still feels, that there was or still is additional
information required to be submitted by the Church to allow for a proper determination
of exemption of Church Property.
End, Stipulated Facts
The nature of the dispute can be properly categorized, without danger of oversimplifying
or excluding necessary elements, into two main categories.
First is the category of what EXACTLY constitutes a "USE TEST." These
words, "use test" have been referred to by Mr. Byford on several
occasions, and on each occasion I have respectfully asked Mr. Byford for the
exact components of a "use test." Let me give you an example of why
I would ask for such a thing. Hypothetically speaking, because to date no one
from the State of Montana has told me what exactly comprises a "use test." Just
one possible "use test" question would be: "How many members
does your church have?" If I answered 19, but the state had a minimum
of 20, I might fail the test. On the other hand, if I knew that 20 was the
minimum, I might decide to recruit one more member and thereby meet the minimum
requirement. Without such specific information, I can only assume that the
state of Montana intends to hold my answers, should I choose to answer, up
to arbitrary and capricious standards, the criteria about which are secret.
The second category is that regarding the question of constitutionality. In
its most general sense, the question presented in this instant matter, is exactly
the same one I've asked Mr. Byford on several previous occasions - and by the
way, I notice, by its conspicuous absence from his letter to this board of
May 18, 2000, that he again fails to address, in any manner whatsoever, the
issue of constitutionality. This issue, simply stated is: "Does the State
of Montana have the authority to inquire into the habits, practice, dogma,
precepts, laws and jurisdiction of a Church, and specifically a Church which
has been organized in a manner like the Church in question herein, the Stag
Society, which is NOT a state incorporated church?"
You see, it doesn't matter whether there is or isn't a statute, the existence
of which Mr. Byford intimates although I notice he is extremely careful to
NOT actually state, which controls the activities and organizational structure
of a Church. All statutes are required to be in conformity with the Constitution
of the State and also in conformity with the Constitution for America. So we
must look FIRST to the Constitutions to determine if fundamental authority
exists. ONLY then would we ever be able to get to the specific issues which
might be addressed within such statute such as a "use test."
It is the position of the Stag Society and myself as Overseer thereof, that
the Constitutions specifically prohibit state inquiry into the practices and
organization of our Church. It is further the position of the Stag Society
and myself as Overseer thereof, that the ruling of this honorable board must
be confined to the issue of constitutionality of such requirement, as anything
less will simply generate more lost time and costly litigation while the issue
is brought before state or federal courts for a definitive ruling thereon.
Mr. Byford has requested information on a variety of topics excluded by virtue
of the Constitutional prohibition into church inquiries. I have on several
occasions referred him to the Internal Revenue Code. I made no claim that the
internal revenue code might be uniformly controlling, but my references to
it were in the nature of, even the internal revenue service, the most intrusive
agency ever created, cannot intrude into prohibited areas of inquiry about
our Church . Mr. Byford wants to know, for just an example, if I am a member
of the "clergy." I don't have any idea what he means by "clergy." Is
he using some definition from Montana Code? Or from Montana Dept. of Revenue
rules or rulings? Or from some legal dictionary, or his own private understanding
of the word? Or what: SPECIFICALLY?
Then the problem is made more complex because I provided him a truthful and
complete answer, but it was, for some reason, not acceptable. I suspect because
the definition of the word "Clergy" was not known to either me or
Mr. Byford. But the fact is, I am the head of this Church and I am the ONLY
head of this Church. Is the Pope a member of Mr. Byford's "Clergy ?" How
about the Dali Lama of Tibet, is he a member of Mr. Byford's "Clergy ?" How
about the King of Thailand who, in his capacity as king, also is the head of
the Buddhist religion in his country, a man to whom ALL Thai Buddhists bow,
is he a member of Mr. Byford's approved list of "Clergy ?" If not,
are they to be excluded from Mr. Byford's "approved list of Churches?" Is
the problem herein becoming more clear?
How would Mr. Byford ever know if I submitted documentation certifying that
I was a member of the clergy? Is he capable of recognizing such documents as
true or false? If he were to arbitrarily deny such documents as false or insufficient,
who could make a determination as to their validity and sufficiency unless
the state became intimately involved in the affairs and activities and practices
of our Church, an endeavor which I submit, is strictly prohibited by law.
The above small example of the business of determining whether I am or am not
a member of some yet-to-be-defined "CLERGY" is seen to propose the
answering of questions which the state cannot support or provide an authority
for asking. Further, the answering of such a question is impossible given the
complete lack of information surrounding the terms, the definitions and approving
authority.
Mr. Byford has asked, for another example, "Which of the cabins is used
for actual religious worship." However, I have already properly responded
by telling him that the only activities on this property are proper Church
activities. Only one of my problems with such a question is, how exactly would
Mr. Byford like to qualify "religious worship?" How would he propose
to determine if our form of worship meets his arbitrary and capricious definition?
I say arbitrary and capricious because the supreme law of the land has already
stated that there shall be "NO LAW respecting an establishment of religion,
or prohibiting the free exercise thereof." And therefore we know that
the state of Montana has no such law and if it did, it would be void. So if
I were to submit a specific answer, how EXACTLY would Mr. Byford know whether
our form of worship met his standard? Does he have it written down somewhere
and if so, why, when asked, did he not provide it?
Now perhaps you can see why the position of The Stag Society has been, is,
and will continue to be, that the separation of Church and State are mandatory,
that this doctrine is absolutely controlling in this instant matter and that
this honorable board must uphold it firmly.
Offers of Evidence:
A) As was stated by myself in my letter to Mr. Byford on May 18, 1999 which
letter and the contents was acknowledged by Mr. Byford in his letter to this
board of May 18, 2000, the property is used exclusively for church purposes.
I make this statement herein with full knowledge of the penalties of perjury
and false swearing and I offer this statement as evidence of the use of the
property.
B) As I wrote in my letter to Mr. Edward Thompson, a copy of which was forwarded
to Mr. Byford per his admission at page 2, 2, 1 clause therein, we take the
position thatst the doctrine of the separation of Church and State is immutable:
"It is our opinion, but please feel free to correct us if we are wrong,
that church activities, gatherings, personnel and property are all fully protected
from inspections or determinations of fitness by the state. As we've stated,
if we are wrong, by all means please let us know and give us knowledge of what
law or laws we would be in violation of if we denied you access to our Church
for any purpose other than for worship. The American Constitution states that, "Congress
shall make NO LAW respecting an establishment of religion, or prohibiting the
free exercise thereof; or abridging the freedom of speech, . ." If the state
of Montana has strongly held beliefs to the contrary we will respect them; but
we have the absolute right to know precisely what these contrary beliefs are,
do you not agree?"
I submit the foregoing as testimonial evidence herein with full knowledge of
the penalties of perjury and false swearing and I offer the foregoing as evidence
of the good faith nature of my requests to be informed as to the nature and
authority for inquiries into our church.
C) No inquiry by me regarding where Mr. Byford has determined he has the authority
to ask questions which transgress the boundaries of the separation of Church
and State has EVER been answered.
I submit the foregoing as testimonial evidence herein with full knowledge of
the penalties of perjury and false swearing, and I offer the foregoing as evidence
of the good faith nature of my requests to be informed as to the nature and
authority for inquiries into our church.
D) Mr. Byford's letter of January 20th does, finally, disclose the true nature
of his inquiries. At the top of page 2, as a continuation of paragraph number
1 from page 1, Mr. Byford wrote ". as to whether the property meets the
statutory requirements for exemption. ." It seems clear, and it is the
position of The Stag Society, that Mr. Byford's inquiry is based on attempts
to obey and abide by the statutes.
The foregoing is submitted as evidence herein with full knowledge of the penalties
of perjury and false swearing, and is offered as proof that even Mr. Byford
knows and acknowledges that it is only in pursuit of a statutory enactment
that information contrary to the constitutions is being sought. However, all
statutes are required to be written to be in absolute conformity with the Constitution
and any which are not are void of law.
E) I also submit herein the following as evidence of the law in this matter
and it is the position of the Stag Society that the below constitutes the law
of this case and the Stag Society hereby relies upon the following cases:
(1) "Supremacy Clause of national Constitution (Art. VI, cl 2) is not
source of any national rights, but rather accords all national rights, whether
created by treaty, statute, or regulation, priority when ever they come in
conflict with state law." Chapman v. Houston Welfare Rights Organization
(1979) 441 US 600, 60L Ed 508.
(2) "The Constitution forbids the exercise of the regulatory police power
where it would result in the destruction of rights, guaranties, privileges,
and restraints excepted from the powers of government by the Bill of Rights." Travelers'
Inc. Co. v. Marshall, 124 Tex 45, 76 SW2d 1007, 96 ALR 802
(3) "A claim that action is being taken under the regulatory police power
of the state cannot justify disregard of constitutional inhibitions." Panhandle
Eastern Pipe Line Co. v. State Highway Com., 294 US 613, 79 L Ed 1090, 55 S
Ed 1709, 55 S Ct 652
(4) "The exercise of the regulatory police power cannot be made a cloak
under which to overthrow or disregard constitutionally protected rights." Graff
v. Priest, 356 Mo 401, 201 SW2d 945, cert den 332 US 770, 92 L Ed 356, 86 S
Ct 83
(5) "Each state has the power to regulate the relative rights and duties
of all persons, individuals, and corporations within its JURISDICTION for the
public convenience and the public good, the only limitation being that such
regulations shall not prove repugnant to the provisions of the state or national
Constitution." Alabama State Federation of Labor of McAdory, 246 Ala 1,
18 So 2d 810, cert dismd 325 US 450, 89 Led 1725, 65 S Ct 1384 (See also, Marbury
v. Madison 5 US 137).
(6) "An unconstitutional act is not law; it confers no rights: in (sic)
imposes no duties: affords no protection: it creates no office: it is legal
contemplation, as inoperative as though it had never been passed." Norton
v. Shelby County, 118 US 425.
(7) "Constitutionally protected rights cannot be frittered away little
by little until the substance is gone and only the shadow remains." Olds
v. Klotz, 131 Ohio St 447, 6 Ohio Ops 129, 3 NE2d 371.
(8) "The regulatory police power, broad as it is, cannot justify the passage
of a law or ordinance which runs counter to the limitations of the national
Constitution." Buckanan v. Warley, 245 US 60, 62 L Ed 149, 38 S Ct 16.
Thank you for your attention to this matter and please enter this entire document
into the proceeding as evidence in this matter. If you have any questions,
please do not hesitate to contact me.
Stevens Lawrence; Hart, Overseer The Stag Society c/o Mr. David Shapel 11681
Watson Road St. Ignatius, Montana 59864
(Document notarized on June 14, 2000 by Brenda A. Davis, Notary Public for
Oregon, Commission No. 311423.)
[7] Mr. Hart began his testimony by presenting the five proposed stipulated
facts contained in the above affidavit for agreement by the DOR. Mr. Byford
agreed to stipulated fact number one, that The Stag Society applied for an
exemption, as the records of Sanders County show, on or about February 23,
1999 . He requested the additional stipulation that it was received in the
Sanders County Department of Revenue office on February 25th, and this was
agreed to by Mr. Hart. Mr. Byford agreed to stipulated fact number two, The
Stag Society owns, by virtue of certain purchase documents and the deed issued
as a result thereof, all of which are a matter of public record in the records
of Sanders County Montana, hereinafter the subject property, to wit: the East
620 Feet of Lot Six in Section 1, Township 18 North Range 25 West consisting
of approximately 13.83 acres all within the County of Sanders, and associated
buildings and other appurtenances; . . . After discussion, it was agreed that
the legal description should be corrected to read "the East 820 Feet of
Lot Six in Section 1, Township 18 North, Range 25 West . . ." rather than "620
feet" as indicated in the affidavit.
[8] Stipulated fact number three states that The Stag Society
is a Church organized pursuant to the Holy Scriptures, subservient
to the Laws of the Creator of the Universe whose office, "The
office of the Presiding Patriarch (Overseer) and his successors,
a corporation sole over/ for an unincorporated religious
Scriptural society, in the nature of Ecclesia, The Stag Society" has
been duly recognized pursuant to the laws of the State of
Nevada . . .", and Mr. Byford testified that the DOR
will stipulate that "we would recognized you as a church.
What the import of all the additional information that you
have in that particular paragraph is, I will not stipulate
to. I will just stipulate to that it is a church. We recognize
it as a church." Following questioning by Mr. Hart,
Mr. Byford further testified that he also accepts that the
society has been recognized pursuant to the laws of the State
of Nevada.
[9] Stipulated fact number four states that without regard
as to the specifics, Mr. Hart in his capacity as overseer
of the Church, supplied certain information to Mr. Byford
and his office, all of which was relevant and accepted by
Mr. Byford . Mr. Byford responded that "You supplied
some information to me. I don't agree that it was all relevant,
and I don't agree that you provided the information that
I asked for. So I can't totally stipulate to paragraph four." He
agreed to stipulated fact number five, Without regard to
the specifics, Mr. Byford or his superiors in the Montana
Department of Revenue felt or still feels, that there was
or still is additional information required to be submitted
by the Church to allow for a proper determination of exemption
of Church Property .
[10] Mr. Hart explained that as the current overseer of
The Stag Society, he is the head of the church. He is uncertain
of what proof is required by the DOR to accept him as a member
of the clergy. Although Mr. Byford had "listed a number
of things that he feels that a member of the clergy should
be doing, . . . I'm quite certain . . . that the State doesn't
have an interest in the church that it can tell the church
which ones of those many items they need to be doing to be
considered a church, or to be considered a member of the
clergy of a church." Mr. Hart testified that he had
asked for, but had not received, copies of the DOR's "use
test" that explains how many members are required in
order to be considered a church. He believes that The Stag
Society would "need to know what the test is going to
be comprised of before we can answer the questions." If
he answered the question of how many members his church had
by stating "19" and the state had a minimum of
20, he would fail the test. If he knew that 20 was the required
minimum and his church had only 19 members, he would find
another member before responding to the question. Mr. Hart
believes that it is unconstitutional for the State to ask
such questions of churches as well as to set the standards
for churches.
[11] Mr. Hart testified that The Stag Society's property,
including the two cabins located on the land, are owned by
the church and all of this property is used for worship.
He stated that "a church is not necessarily a building,
and worship does not necessarily have to take place in a
certain building or in a certain spot." He stated that
he feels that a use test "necessarily places the state
in the position of determining what a proper church is, which
is strictly unconstitutional . . . I think the fact that
they've accepted us as a church, and the requirement is that
a church is a tax-exempt entity, that we are tax exempt."
[12] Mr. Hart felt that, prior to the stipulation that The
Stag Society is a church, there may have been confusion on
the part of the DOR as to whether the Society was a 501(c)(3)
tax-exempt organization rather than a church. On the application
form for the Montana property tax exemption, Mr. Hart had
explained that the Society had no Federal Internal Revenue
Service Tax Exempt Status Letter because "churches are
under mandatory exceptions ." He testified that churches
are "mandatorily exempt from getting a number" as
indicated on page 5 of Taxpayer's Exhibit 1, which quotes
pertinent parts of 26 USCA 508 and 26 USCA 6033 as follows:
Section 508. Special rules with respect to section 501(c)(3)
organizations
(a) New organizations must notify Secretary that they are applying for recognition
of section 501(c)(3) status. -- Except as provided in subsection (c), an organization
organized after October 9, 1969, shall not be treated as an organization described
in section 501(c)(3) --
(1) unless it has given notice to the Secretary, in such manner as the Secretary
may by regulations prescribe, that it is applying for recognition of such status,
or
(2) for any period before the giving of such notice, if such notice is given
after the time prescribed by the Secretary by regulations for giving notice
under this subsection .
(b) Presumption that organizations are private foundations. -- Except as provided
in subsection (c), any organization (including an organization in existence
on October 9, 1969) which is described in section 501(c)(3) and which does
not notify the Secretary, at such time and in such manner as the Secretary
may by regulations prescribe, that it is not a private foundation shall be
presumed to be a private foundation.
(c) Exceptions. --
(1) Mandatory exceptions. -- Subsection s (a) and (b) shall not apply to --
(A) churches, their integrated auxiliaries, and conventions or associations
of churches, or
Section 6033. Returns by exempt organizations
(a) Organizations required to file. --
(1) In general. -- Except as provided in paragraph (2), every organization
exempt from taxation under section 501(a) shall file an annual return, stating
specifically the items of gross income, receipts, and disbursements, and such
other information for the purpose of carrying out the internal revenue laws
as the Secretary may by forms or regulations prescribe, and shall keep such
records, render under oath such statements, make such other returns, and comply
with such rules ad regulations as the Secretary may from time to time prescribe;
except that, in the discretion of the Secretary, any organization described
in section 401(a) may be relieved from stating in its return any information
which is reported in returns filed by the employer which established such organization.
(2) Exceptions from filing. --
(A) Mandatory exceptions. -- Paragraph (1) shall not apply to --
(i) churches, their integrated auxiliaries, and conventions or associations
of churches, .
[13] Mr. Hart testified that he realizes the federal statutes cited do not
control Montana statutes in this case, but he wanted to explain why The Stag
Society did not have a tax exempt letter as requested on the Montana exemption
form.
[14] In response to Mr. Byford's questions, Mr. Hart testified
that he is currently residing in Montana but does not have
a Montana driver's license and is not registered to vote
in Montana. He has "houses in various places," and
he visits his Montana property "when our church business
does not take us to some other area." In response to
questions from the Board, Mr. Hart stated that The Stag Society
has members "in several states." His position as
overseer is comparable to the Pope in the Catholic Church
or the King in the Church of England. Although the Articles
of Incorporation were filed in the State of Nevada, The Stag
Society has no physical location in Nevada. It does have
a physical location in Oregon. At this time, Mr. and Mrs.
Hart spend more time in Oregon than they do in Montana, because
the subject property has no water other than what they pump
out of the river or get from the neighbors. They are in the
process of building roads and selecting a location for a
well. He stated that "Highway 200 divides the property
so it's not hard to inspect. You can stop and look any time
you want." He contends that the entire property is used
for religious worship.
[15] Mr. Hart concluded his testimony by stating that the
position of The Stag Society is that "the State has
no interest in determining whether the church meets their
standards or not . . . If you're going to set down a requirement
that we have x number of members and that we meet x number
of days a year or a month or whatever that standard is, then
we have a problem. And I think that's the entire problem
here."
DOR'S CONTENTIONS
[16] As stated in Taxpayer's Stipulated Fact #5 (Taxpayer's
Exhibit 1, page 2), Mr. Byford "or his superiors in
the Department of Revenue" require additional information
from The Stag Society in order to determine whether the subject
property qualifies for an exemption. Mr. Byford testified
that this required information includes Mr. Hart's qualifications
as a member of the clergy. Mr. Byford stated that in most
denominations, members of the clergy are persons who have
been ordained or gone through "some kind of process" to
qualify them and give them "some authority within the
church above and beyond what a layman would have," and
they generally perform such duties as funerals, weddings
and worship services. Mr. Byford testified that he processes
between 500 and 1,000 applications per year for exemptions,
with approximately 80% of them being church organizations.
He has not had to question whether or not the applying organizations
were actually churches, because "it's usually pretty
obvious. They have a standard church building, they're a
member of one of the major denominations, and they have a
process for choosing a member of the clergy, . . . who runs
the church, conducts the worship services and has the authority
to do all the things that the dictionary would indicate a
clergy member would do."
[17] DOR's Exhibit A consists of three photographs of the
subject property, which show two cabins on the land. Mr.
Byford explained that he had unsuccessfully attempted to
determine from Mr. Hart which building was used for religious
worship and which was occupied by a member of the clergy
in order to properly apply the exemption statute, section
15-6-201(1)(b), MCA: "(1) The following categories of
property are exempt from taxation: (b) buildings, with land
that they occupy and furnishings in the buildings, that are
owned by a church and used for actual religious worship or
for residences of the clergy, together with adjacent land
reasonably necessary for convenient use of the buildings;" He
testified that since the statute allows exemption for land
that is "reasonably necessary for the convenient use
of the building," the DOR must determine how much of
the land is exempt. "Normally with a cabin like that,
it would be somewhere between a half acre and an acre that
would be exempt with the cabin, unless you have a very large
congregation and you need a large parking lot, then it could
be larger than that."
[18] Mr. Byford cited the following relevant court cases
and previous State Tax Appeal Board decisions upholding the
position of the Department of Revenue: Old Fashion Baptist
Church v. Department of Revenue, 206 Mont. 451; Flathead
Lake Methodist Camp v. Webb, 144 Mont. 565; Cruse v. Fischl,
55 Mont. 258; Church of Christ v. DOR, SPT-1984-22; Emmanuel
Baptist Church v. DOR, SPT-1985-3; Belt Community Church
v. DOR, SPT-1987-17; Fellowship Baptist Church v. DOR, SPT-1990-6;
Trinity Baptist Church v. DOR, SPT-1990-7; and Westside Baptist
Church of Billings v. DOR, SPT-1999-2.
[19] Mr. Byford presented the Articles of Incorporation
of The Stag Society as DOR's Exhibit B. He concluded his
presentation by stating that the DOR "is required to
administer the state statutes as written . . . In the case
of churches, the statute is pretty clear that it only applies
to buildings that are used for actual religious worship or
residences of the clergy, along with adjacent land reasonably
necessary for convenient use of those buildings. I don't
believe that The Stag Society has proven that they meet the
requirements of this statute as far as the use is required."
BOARD'S DISCUSSION
[20] The Board considered the post-hearing submissions:
(1) copies of the court and STAB decisions cited by Mr. Byford;
(2) DOR's post-hearing brief dated October 13, 2000, in which
the DOR responded to the court cases cited by The Stag Society;
and (3) The Stag Society's reply to the DOR's brief.
[21] Relevant points made by the DOR in the cases they cited
were as follows: (1) In Cruse v. Fischl, 55 Mont. 258, the
Montana Supreme Court held that "tax exemptions must
be construed strictly in favor of taxation and against exemption." (2)
In Flathead Lake Methodist Camp v. Webb, 144 Mont. 565, the
Court ruled that property owned by the Methodist Church and
used for a summer camp was entitled to an educational, rather
than a religious, exemption. Religious education was considered
exempt as an "educational purpose" and not as "actual
religious worship." (3) In Old Fashion Baptist Church
v. Department of Revenue, 206 Mont. 451, the Court held that "four
lots adjacent to the church and parsonage were not reasonably
necessary for convenient use of the church buildings, and
exemptions for them could not be granted ." (Emphasis
added) In the six STAB decisions cited by the DOR: Church
of Christ v. DOR, SPT-1984-22; Emmanuel Baptist Church v.
DOR, SPT-1985-3; Belt Community Church v. DOR, SPT- 1987-17;
Fellowship Baptist Church v. DOR, SPT-1990-6; Trinity Baptist
Church v. DOR, SPT-1990-7; and Westside Baptist Church of
Billings v. DOR, SPT-1999-2, STAB upheld the DOR's decisions
relating to exemptions for only the buildings and the land
specifically designated in section 15-6-201(1)(b), MCA: .
. . (b) buildings, with land that they occupy and furnishings
in the buildings, that are owned by a church and used for
actual religious worship or for residences of the clergy,
together with adjacent land reasonably necessary for convenient
use of the buildings;" (emphasis added).
[22] At the request of Mr. Byford, the DOR's legal department
reviewed the cases cited by The Stag Society (Taxpayer's
Exhibit 1, "Affidavit," pages 5-6), which were
presented to support The Society's argument that "the
Constitutions specifically prohibit state inquiry into the
practices and organization of our Church." (Affidavit,
page 3) The DOR's post-hearing brief, prepared by Tax Counsel
Stephen R. McCue, states that "None of the cases cited
by the Stag Society have any bearing on the issue at hand
in this case . . ." Other portions of the post-hearing
brief relevant to the Board's discussion are reprinted as
follows:
SECTION 15-6-201, MCA, EXEMPTING CERTAIN CATEGORIES OF PROPERTY
FROM TAXATION, DOES NOT VIOLATE THE UNITED STATES OR MONTANA
CONSTITUTIONS, NOR DO STAB OR DOR VIOLATE THE STAG SOCIETY'S
CONSTITUTIONAL RIGHTS BY INQUIRING INTO THE PARTICULARS OF
THE USE OF THE PROPERTY FOR CHURCH PURPOSES . . .
Section 15-6-201, MCA, provides in relevant part: (1) The following categories
of property are exempt from taxation. (b) buildings, with the land that they
occupy and furnishings in the buildings, that are owned by a church and used
for actual religious worship or for residences of the clergy, together with
adjacent land reasonably necessary for convenient use of the buildings . .
.
The statute by its terms requires proof that the property is being put to the
use specified in the statute. A mere assertion by the Stag Society that it
is in fact using the property for church purposes, without more, is not enough
to carry the Stag Society's burden of proof. The Stag Society must show that
the property is "used for actual religious worship or for residences of
the clergy, together with adjacent land reasonably necessary for convenient
use of the buildings. "The Stag Society failed to carry its burden of
proof because it offered nothing more at the hearing in this case than its
bare assertion that it is a church, without offering any evidence as required
by section 15-6-201(1)(b), MCA, to support its assertion.
The Stag Society maintains that it need not offer such evidence because section
15-6-201(1)(b), MCA, violates both the United States and Montana Constitutions.
The Stag Society cites several United States Supreme Court and lower court
cases in support of its argument that it is free from any governmental scrutiny
whatsoever in the matter of whether it is utilizing its property for church
purposes . . .
None of the cases cited by the Stag Society have any bearing on the issue at
hand in this case as set forth above. It is well settled that the State of
Montana may inquire into the use of the premises for church purposes under
section 15-6- 201(1)(b), MCA, in order to determine if the property is exempt
from property taxation. Such an inquiry, as conducted in this case, does not
run afoul of either the United States or Montana Constitutions. In Old Fashion
Baptist Church v. Montana Department of Revenue, 206 Mont. 451, 671 P. 2d 625
(1983), the Montana Supreme Court inquired into the use of property for church
purposes under section 15-6-201(1)(b), MCA, and noted in doing so that exemptions
from tax such as this statute are expressly authorized by Article VIII, section
5, of the Montana Constitution. The mere fact of ownership by a church is not
sufficient to qualify the property for the exemption . . .
The First Amendment of the United States Constitution also does not bar the
State of Montana from inquiring into the activities of religious organizations
such as the Stag Society in order to administer the tax laws. Such an inquiry
is often necessary if the laws are to be fairly enforced . . .
[23] On November 27, 2000, Mr. Hart filed The Stag Society's eleven-page reply
to the DOR's brief. We disagree with the Society's contentions that "all
relevant evidence and testimony was submitted and is currently before this
board proving and attesting to its activities and use of the property as a
church;" and that "every single question the State of Montana has
asked regarding whether the property will be used for church purposes, and
if so, how much of the property will be so used, has been forthrightly answered
with alacrity." The Board does not know what activities are conducted
on the property nor how the land and buildings are used for "actual religious
worship" and "residences of the clergy," despite Mr. Hart's
contention that "it is uncontested that both testimony and the application
for exemption state that the entire property and all of its buildings are involved
in the activities of the church and its religious pursuits. Mr. Hart further
contended that "the state has failed to introduced a single shred of evidence
or testimony which would indicate, much less prove, that the Society does not
use the property for church purposes, or that it uses only a subset of the
property for church purposes." The Stag Society brought this appeal to
the Board and, therefore, has the burden of proof rather than the Department
of Revenue, as Mr. Hart is suggesting. The Stag society offered no testimony,
no exhibits and no responses to Board and DOR questions during the hearing
to substantiate their claim that the subject property qualifies for a religious
exemption.
[24] The Board agrees with the Society's contention that
the DOR's "use test" involves arbitrary criteria.
Mr. Hart states, on page 2 of the reply brief, that "this
board heard testimony from Department of Revenue employees
that there are NO STATUTES or RULES or REGULATIONS or other
writings which are uniformly applied to determine suitability;
testimony taken stated that indeed the application of such
a "use test" involved the use of "ARBITRARY
CRITERIA." Neither the statutes nor the administrative
rules contain the actual term "use test," nor do
they define the terms "church," "actual religious
worship," "clergy," "residences of the
clergy," and "reasonably necessary for convenient
use of the buildings." That the term itself and the
specifics of a "use test" are not clearly delineated
in the relevant statutes and administrative rules is a valid
concern, as expressed by Mr. Hart. Mr. Byford's April 28,
1999 letter to The Stag Society requested information that
included "proof that occupant of the parsonage is a
member of the clergy (if this is a parsonage) and whether
the building(s) is used for: a) a parsonage, b) religious
worship services (if so, when are they held and how many
members do you have), or c) other purposes (please describe
in detail)? (Factual Background, #4) The Board notes that
neither the statute nor the administrative rules refer to
a "parsonage," which is defined in the Random House
Webster's College Dictionary, 1997, as "the residence
provided by a parish for its pastor ." By definition,
a "parsonage" could be different from a "residence
of the clergy," which might be a home owned by, paid
for, and lived in by the clergy member, rather than one provided
by a parish.
[25] Mr. Byford again asked questions of Mr. Hart regarding
church membership in his letter of January 20, 2000, stating ".
. . I still need to know how many members are in your Church,
how often you hold worship services, and how many members
usually attend these services in order to determine if the
property qualifies for exemption under this use requirement." (Factual
Background, #10) Since the statute and administrative rules
do not provide standards for religious worship services,
including how often they are to be held, or the number of
church members required, the Board questions how such information
could be objectively used by the Department of Revenue.
[26] If there are no stated standards or definitions for
churches, clergy, worship, membership in the church, numbers
of parishioners required, and amount of land that is considered
necessary for "convenient use" of the buildings,
how can the Department of Revenue accurately and impartially
determine if an entity requesting a religious exemption is
or is not entitled to the exemption? In the cases cited by
the DOR, this Board and the courts have upheld the determinations
of the DOR despite the "arbitrary criteria," but
the Board believes the DOR might consider adopting administrative
rules or written department policies that are more specific.
The Board takes notice of prior testimony relating to land
area exemptions in Trinity Baptist Church v. DOR, SPT-1990-7, "The
DOR emphasized that each church property proposed for exemption
is judged on its own circumstances which results in varied
proportions, or area sizes, that receive approval. Such consequences
are inevitable and are not evidence of bias or inconsistency
by the DOR."
[27] The DOR stipulated that The Stag Society is a church.
Mr. Hart testified that he is the overseer, or the head of
the church, so the Board could assume that he would be considered
a "member of the clergy." The statute provides
for an exemption for "residences of the clergy," but
Mr. Hart did not specify which, if any, of the two buildings
located on the subject land might be used as a residence.
In fact, Mr. Hart testified that he had lived in Oregon prior
to purchasing the subject property, he does not have a Montana
driver's license, and he is not registered to vote in Montana.
section 1-1- 215, MCA, defines "residence" as follows:
1-1-215. Residence-rules for determining. Every person has,
in law, a residence. In determining the place of residence,
the following rules are to be observed:
(1) It is the place where a person remains when not called elsewhere for labor
or other special or temporary purpose and to which the person returns in seasons
of repose.
(2) There may only be one residence. If a person claims a residence within
Montana for any purpose, then that location is the person's residence for all
purposes unless there is a specific statutory exception.
[28] Mr. Byford asked Mr. Hart if he "had a house in another location
that you're living in?" and Mr. Hart responded, "I didn't say that.
I'm like a lot of people; I have houses in various places." (STAB hearing
transcript, page 44) The Board is not convinced that either of the two subject
buildings is used as Mr. Hart's residence, thereby qualifying it for exemption
as a "residence of the clergy," nor is the Board convinced that either
or both of the two buildings are used for "actual religious worship ." The
Board finds that the taxpayer failed to present sufficient evidence to sustain
the burden of proof on appeal; and, therefore, the appeal for tax exemption
on the subject property is denied and the decision of the DOR is affirmed.
[29] CONCLUSIONS OF LAW
1. The State Tax Appeal Board has jurisdiction over this
matter. section 15-2-301, MCA.
2. 1972 Montana Constitution, Article VIII, Section 5(1)(b). "The legislature
may exempt from taxation . . . places for actual religious worship . . ."
3. section 15-6-201, MCA. Exempt categories. (1) The following categories of
property are exempt from taxation: (b) buildings, with land that they occupy
and furnishings in the buildings, that are owned by a church and used for actual
religious worship or for residences of the clergy, together with adjacent land
reasonably necessary for convenient use of the buildings.
4. The appeal of the taxpayer is hereby denied and the decision of the Department
of Revenue is affirmed.
ORDER
[30] IT IS THEREFORE ORDERED by the State Tax Appeal Board
of the State of Montana that the subject property shall be
maintained on the tax rolls of Sanders County by the local
Department of Revenue office at the value determined by the
DOR. The appeal of the taxpayer is therefore denied, and
the decision of the DOR denying exemption on the subject
property for tax year 1999 is affirmed.
[31] Dated this 20th day of December, 2000.
BY ORDER OF THE STATE TAX APPEAL BOARD
(SEAL)
GREGORY A. THORNQUIST, Chairman
JAN BROWN, Member
JEREANN NELSON, Member
NOTICE: You are entitled to judicial review of this Order in accordance with
Section 15-2-303(2), MCA. Judicial review may be obtained by filing a petition
in district court within 60 days following the service of this Order.
CERTIFICATE OF SERVICE
[32] The undersigned hereby certifies that on this 20th
day of December, 2000, the foregoing Order of the Board was
served on the parties hereto by depositing a copy thereof
in the U. S. Mails, postage prepaid, addressed to the parties
as follows:
The Stag Society Stevens Lawrence; Hart, Overseer P.O. Box
104 Paradise, Montana 59856
Office of Legal Affairs Department of Revenue Mitchell Building Helena, Montana
59620
Sanders County Appraisal Office P.O. Box 319 Thompson Falls, Montana 59873
DONNA EUBANK Paralegal
Return to Tax Protestor Exhibit
