Case Title: Institute of Professional Practice, Inc. v. Town of Berlin

Citation: 174 Vt. 535, 811 A.2d 1238

Docket Number: 

State: vermont

Court: Vermont Supreme Court

Date: 2002-08-20T00:00:00Z

Document:
Institute of Professional Practice, Inc. v. Town of Berlin (2001-296); 
174 Vt. 535; 811 A.2d 1238

[Filed 20-Aug-2002]

                                 ENTRY ORDER

                      SUPREME COURT DOCKET NO. 2001-296

                               MAY TERM, 2002


  Institute of Professional            }	APPEALED FROM: 
  Practice, Inc.	               }
                                       }
                                       }
       v.	                       }	Washington Superior Court
                                       }
  Town of Berlin	               }
                                       }	DOCKET NO. 475-9-98 Wncv

                                                 Trial Judge: Matthew I. Katz

             In the above-entitled cause, the Clerk will enter:

       Appellant Town of Berlin appeals from a declaratory judgment granting
  appellee Institute of Professional Practice, Inc. property tax exemption
  for a lot and building located in the Town of Berlin.  The town argues
  first that the tax exemption in 32 V.S.A. § 3802(4) is only available to
  not-for-profit corporations that provide direct and immediate benefits to
  the citizens of Vermont and the local community where the corporation is
  located, and second that property used for administration and management is
  not tax exempt where other property used by the corporation to provide
  direct services is subject to tax or is out of state.  We affirm.

       The parties have stipulated to the facts, thus they are not in
  dispute.  The Institute of Professional Practice, Inc. (IPP) is a
  not-for-profit corporation.  It has no capital stock or shareholders, pays
  no dividends, and is not run for profit.  IPP owns a 2.33-acre parcel in
  the Town of Berlin (Town), where their corporate headquarters is located. 
  The property is used strictly for administration and management of the
  organization, including accounting, human resources, and executive offices. 
  These functions are necessary to allow IPP to provide services to the
  public.  IPP provides services to people with developmental and other
  disabilities in group homes, foster homes, and other assisted living
  programs located in New Hampshire, Massachusetts, Connecticut, and
  Maryland.  They do not operate any homes in Vermont.  Vermont does benefit
  from two other programs IPP provides: an employee assistance program, which
  assists employers in dealing with their troubled or developmentally
  disabled employees, and the Delta Program, which provides services to male
  perpetrators of physical, emotional, or psychological abuse.  IPP employs
  655 people out of state and twenty people in Vermont.  Less than one
  percent of IPP's gross revenues were generated by services delivered in
  Vermont.
   
       IPP sought a declaratory judgment that they were exempt from tax under
  32 V.S.A. § 3802(4).  In an earlier summary judgment decision, the court
  denied an exemption as to a vacant lot that IPP owns.  IPP has not appealed
  this ruling.  The court denied summary judgment twice as to the parcel in
  question here because there were still disputed questions of fact.  In a
  later status conference, the 

 

  court found that the dispute was over a question of law and directed the
  parties to file stipulated facts, which they did.  Four months later,
  without a hearing, the court issued its opinion and judgment granting IPP
  the tax exemption it sought.

       The Town appeals the court's judgment on two grounds.  First, the Town
  contends that implicit in the requirements for tax exemption in § 3802(4)
  is a requirement that the taxpayer provide direct and immediate benefits
  principally to Vermonters and citizens of the Town.  Second, the Town
  argues that the parcel should not be exempt because it is not used for
  direct services, and the out-of-state property used for direct services is
  all subject to property tax.

       The property tax exemption in this case is governed by 32 V.S.A. §
  3802(4), which provides, in relevant part, that "[r]eal and personal estate
  granted, sequestered or used for public, pious or charitable uses" is
  exempt from property taxes.  To be exempt from property tax as a public or
  charitable use, the property must meet three criteria: "(1) the property
  must be dedicated unconditionally to public use; (2) the primary use must
  directly benefit an indefinite class of persons who are part of the public,
  and must also confer a benefit on society as a result of the benefit
  conferred on the persons directly served; and (3) the property must be
  owned and operated on a not-for-profit basis."  Am. Museum of Fly Fishing,
  Inc. v. Town of Manchester, 151 Vt. 103, 110, 557 A.2d 900, 904 (1989). 
  The parties agree that IPP meets the first and third criteria.  Their
  dispute focuses on the second criterion.

       "It is axiomatic that a tax exemption is to be strictly construed
  against the party claiming it, although such a provision must be construed
  reasonably and not in a manner that would defeat the purposes of the
  statute."  Medical Ctr. Hosp. v. City of Burlington, 152 Vt. 611, 615, 566 A.2d 1352, 1354 (1989) (citing Am. Museum of Fly Fishing, 151 Vt. at 108,
  557 A.2d at 903). We are in this case construing the tax exemption statute. 
  If the plain meaning of the statute resolves the controversy, we normally
  accept it without going further.  See Town of Killington v. State, 172 Vt.
  182, 188,