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### STATE OF MICHIGAN

COURT OF APPEALS

HARMONY MONTESSORI CENTER,

Petitioner-Appellant, UNPUBLISHED October 13, 2016

v No. 326870 Tax Tribunal CITY OF OAK PARK, LC No. 00-370214

Respondent-Appellee.

Before: T ALBOT , C.J., and O’C ONNELL and O WENS , JJ.

O’C ONNELL , J. ( dissenting ).
I respectfully dissent.
The majority opinion and the tribunal both conclude that Harmo ny Montessori Center (Harmony) cannot be a charitable organization because it charge s its students tuition and fees for services. I respectfully disagree. The majority’s conclusion is also directly contrary to Wexford Med Group v City of Cadillac , 474 Mich 192, 215; 713 NW2d 734 (2006). Because I conclude that Harmony is a charitable organization under MCL 211.7 o , I would reverse and remand.
I agree with the majority in its statement of the standard of review and application of MCL 211.7n. My disagreement lies with its application of MCL 2 11.7 o , the charitable institution exception.

MCL 211.7 o (1) provides an exemption for pr operty owned by a charitable in stitution:
Real or personal property owned and occupied by a nonprofit cha ritable institution while occupied by that nonprofit charitable institu tion solely for the purposes for which that nonprofit charitable institution was in corporated is exempt from the collecti on of taxes under this act.
To qualify as a charitable institution, “it is the overall natu re of the institution, as opposed to its specific activities, that should be evaluated.” Wexford , 474 Mich at 213. The Tribunal should consider the following factors wh en evaluating the charitable n ature of an institution:
(1) A “charitable instituti on” must be a nonprofit institution

.-2- (2) A “charitable institution” i s one that is organized chiefl y, if not solely, for charity.
(3) A “charitable institution” does not offer its charity on a discriminatory basis by choosing who, among the group it purports to serve, de serves the services. Rather, a “charitable institution” serves any person who needs the particular type of charity being offered.
(4) A “charitable institution” brings people’s minds or hearts under the influence of education or relig ion; relieves people’s bodies fr om disease, suffering, or constraint; assists people to establish themselve s for life; erects or maintains public buildings or works; or otherwise lessens the b urdens of government.
(5) A “charitable institution” can charge for its services as long as the charges are not more than what is needed for its successful mai ntenance.
(6) A “charitable institution” need not meet any monetary thre shold of charity to merit the charitable institution exemption; rather, if the overall nature of the institution is charitable, it is a “charitable institution” regardless of how much money it devotes to charitable ac tivities in a particular year. [ Id . at 215.]
The Tribunal may not focus solely on the amount of free service s an organization provides when determining whether the organi zation is charitable in nature. Id . at 213.

Most of the Wexford factors are not in issue because Oak Park has stipulated to th em. Harmony Montessori Ctr v City of Oak Park , unpublished opinion per curiam of the Court of Appeals, issued February 18, 2014 (Docket No. 312856); slip op at 4. Considering only the second factor, similar to the petitioner in Wexford , Harmony established that it does offer reduced rates of tuition to children in financial need. The Tr ibunal found that such rates existed, though only a few students receiv ed them. The record does not establish that Harmony gives any preferential treatment to those students who can pay full-price tuition or discriminates in any manner against children seeking a Montessori education. See Wexford , 474 Mich at 216-217. And similar to the petitioner in Wexford , Harmony established that its costs are not fully subsidized by tuition. Instead, Harmony also holds fundraisers and accepts donations. See Wexford , 474 Mich at 217.
Under the majority’s conclusion, any educational charity that collects tuition for its services is not a charity under Wexford , as any amount of tuition will go to partially making up financial deficits. This is directly contrary to Wexford , in which the Michigan Supreme Court stated that the Tribunal may not focus solely on the amount of free services an organization provides. Id . at 213. Instead, a charitable organization “need not meet an y monetary threshold of charity to merit the charitable institution exemption” and “ if the overall nature of the institution is charitable, it is a ‘charitable institution’ reg ardless of how much money it devotes to charitable activities i n a particular year.” Id . at 215.
In this case, Harmony is a nonprofit organization that provide s nondiscriminatory educational services to childre n and does not charge more than it needs for its successful-3- maintenance. I would conclude that the Tribunal in this case a dopted a wrong principle when it based its decision regarding Ha rmony’s charitable nature solely on the fact that Harmony charges tuition and fees.

I would reverse the deci sion of the tribunal.

/s/ Peter D. O’Connell