BEFORE THE UTAH STATE TAX
COMMISSION
____________________________________
XXXXX, ) FINDINGS OF FACT,
Petitioner, : CONCLUSIONS OF LAW,
: AND FINAL
DECISION
:
v. :
:
OPERATIONS
DIVISION OF THE : Appeal No. 90-3206
UTAH STATE TAX COMMISSION, :
: Tax Type:
Sales/Exemption
Respondent. :
____________________________________
STATEMENT OF CASE
This
matter came before the Utah State Tax Commission for a formal hearing on
XXXXX. Commissioner Joe B. Pacheco,
Paul F. Iwasaki and Lisa L. Olpin, Hearing Officers, heard the matter for and
in behalf of the Commission. Present
and representing the Petitioner was attorney XXXXX. Present and representing the Respondent was XXXXX, Assistant Utah
Attorney General.
Based
upon the evidence and testimony presented at the hearing, the Tax Commission
hereby makes its:
FINDINGS OF FACT
1. Petitioner, a non-profit organization, is
requesting sales tax exemption, claiming it is a charity institution.
2. Petitioner has been granted federal
exemption under §501(c)(19) of the Internal Revenue Code. This code section grants tax exemption
status to XXXXX organizations, including any XXXXX units.
3. Petitioner has reiterated its primary
purpose on three separate occasions on three separate documents: a. Petitioner's Articles of Incorporation,
which were filed on XXXXX, state in paragraph 3:
3. [The] [purpose of this corporation is to
coordinate the activities of various XXXXX and XXXXX organizations all
interested in the XXXXX of the XXXXX.
b. An unfiled, notarized document entitled
"Articles of Amendments, Articles of Incorporation XXXXX", dated
XXXXX changes paragraph 3 to read:
3. The purpose of this corporation is to
coordinate the activities of various XXXXX and XXXXX organizations, which is to
perpetuate the XXXXX of XXXXX and members of the XXXXX and to XXXXX their XXXXX
and to promote programs for religious, charitable and educational purposes and
to sponsor and participate in activities of a XXXXX nature.
c. On Petitioner's application for sales tax exemption,
the specific purpose for the organization is:
[to
proactively support and defend issues and activities that are valuable and
beneficial to the XXXXX of the State of Utah and the XXXXX community.
4. Included in Petitioner's membership are a
number of XXXXX-affiliated organizations.
5. Petitioner receives funds from member
organizations and the public.
6. Currently, Petitioners' targeted goal is to
help fund and cause the XXXXX to be completed.
7. The XXXXX is in charge of the development, maintenance,
and operation of the XXXXX and XXXXX.
It may receive contributions from XXXXX organizations to carry out its
responsibilities. Utah Code Ann.
§71-1-3.
8. Petitioner has supplied the XXXXX with sod
and fencing.
9. A museum and other historical displays are
planned for the park.
10. The XXXXX is restricted to the burial of
XXXXX, members of the XXXXX and XXXXX and their spouses. Members of the XXXXX are buried at no cost,
whereas spouses are charged a fee. To
date 129 members of the XXXXX have been buried there.
11. Petitioner also runs a day care facility at
the XXXXX.
12. Petitioner pays for the registering of
lobbyists who, in turn, lobby on issues affecting XXXXX.
13. Petitioner does not have any operating
expenses; its staff serves without compensation.
14. Paragraph 9 of the 1982 Articles of
Incorporation states that upon dissolution of the corporation, all of the
assets shall be disposed of to such "organization or organizations
organized and operated exclusively for charitable, educational, religious, or
scientific purposes."
CONCLUSIONS OF LAW
"Sales
made to or by religious or charitable institutions in the conduct of their
regular religious or charitable functions and activities are entitled to sales and
use tax exemption. (Utah Code Ann.
§59-12-104(8) and Utah Administrative Procedures RuleR865-19S-43).
Charity
has been judicially defined as follows:
The
contribution or dedication of something of value ... to the common good,
...individual or group sacrifice for the welfare of the community.
Salt Lake County v. Tax Commission, 658 P.2d 1192, 1194 (Utah
1983), citing Salt Lake county v. Tax Commission Ex Rel. Greater Salt Lake
Recreational Facilities, 596 P.2d 641 (Utah 1979).
Activities
... rendered for the general improvement and betterment of mankind which
benefit the community as a whole or an unascertainable and indefinite portion thereof.
Salt Lake County v. Tax Commission, supra, at 1194,
citing B.P.O.E. No. 85 v. Tax Commission, 536 P.2d 1214 (Utah 1975).
In
Department of Revenue and Taxation v. Casper Legion Baseball Club, 767
P.2d 608, 611 (Wyo. 1989), the Wyoming Supreme Court cited Utah case law,
specifically Youth Tennis Foundation v. Tax Commission, 554 P.2d 220 (Utah
1976), in determining that their Department of Taxation:
[s]hould
focus on whether the charity primarily engages in activities providing an
indefinite number of persons in the general public with benefits designed to
aid them in an educational, moral, physical, or social manner. The Department should also consider whether
the charity provides access to those benefits in an equal and nondiscriminatory
way.
In
deciding whether or not Petitioner should be classified and afforded the
benefit of the exemption, it is appropriate to examine not only what it says,
but more importantly, what it does. Youth
Tennis Foundation v. Tax Commission, supra, at 222.
Further,
"the fact that a person or entity is exempt from federal taxation under
the Internal Revenue code is not determinative of a claim for an exemption
under Utah law, though it may be a factor for consideration." XXXXX, supra, 598 P.2d at
1351.
DECISION AND ORDER
In
the current case before the Commission, Petitioner's stated purpose is to
accomplish those activities that will benefit XXXXX of the State of Utah. To date, Petitioner has devoted its funds
and efforts in support of the XXXXX and, to a lesser degree, a daycare center
at the XXXXX.
The
erection and maintenance of the XXXXX is a mandated goal of the State. The park benefits XXXXX as well as the
community at large in that it provides a place of XXXXX and XXXXX for those who
have XXXXX our XXXXX. There is tremendous
educational and historical value to be had in the establishment and continuing
maintenance of such a unique and XXXXX place.
In
light of Petitioner's statements of purpose and in examining how the
Petitioner's activities benefit society at large, the Tax Commission finds that
Petitioner does qualify as a charity within the meaning of Utah Code Ann.
§59-12-104(8), and therefore, is granted sales tax exemption status. It is so ordered.
DATED
this 22 day of January, 1992.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
R. H. Hansen Roger
O. Tew
Chairman Commissioner
Joe B.
Pacheco S.
Blaine Willes
Commissioner Commissioner