Title: Better Living Services v. Bolivar County
Citation: 587 So. 2d 914
Docket Number: 90-CA-0509
State: Mississippi
Issuer: Mississippi Supreme Court
Date: October 16, 1991

587 So. 2d 914 (1991) BETTER LIVING SERVICES, INC. v. BOLIVAR COUNTY, Mississippi and the City of Cleveland, Mississippi. No. 90-CA-0509. Supreme Court of Mississippi. October 16, 1991. Shane F. Langston, Langston &amp; Frazer, Jackson, for appellant. Benjamin E. Griffith, Griffith &amp; Griffith, Cleveland, for appellees. Before HAWKINS, P.J., and SULLIVAN and BANKS, JJ. SULLIVAN, Justice, for the Court: Better Living Services, Inc., a non-profit corporation chartered in Tennessee, sought an exemption from county and city ad valorem taxes for its "Section 8 Apartments" in Cleveland, Mississippi. Better Living took the position that it operated within the definition of "charitable society" under Miss. Code Ann. § 27-31-1(d) (Supp. 1990). The Bolivar County Board of Supervisors and the City of Cleveland denied the request for an exemption. Better Living appealed to the Circuit Court of Bolivar County, Mississippi, which granted summary judgment for both taxing authorities, therefore, denying Better Living of its tax exemption. On appeal Better Living raises three issues: (1) That the circuit court erred in determining as a matter of law that the apartment complex was not tax exempted property within the meaning of "charitable society" of Miss. Code Ann. § 27-31-1(d) (1972); (2) That the court erred in denying taxpayer due process of law in violation of § 14, Article 3 of the Mississippi Constitution and the 14th Amendment of the United States Constitution; and (3) That the court erred in granting summary judgment on taxpayer's claim of discrimination. Better Living built its South Central Village Apartments, a 60 unit complex, in Cleveland, Mississippi, in 1983 with public funds and began operating in 1984. It claims exemption from both county and city ad valorem taxes for the tax years 1987, 1988, and 1989 because: (1) It is organized as a non-profit corporation under § 501(c)(3) of the Internal Revenue Code; (2) It operates under § 202 of the National Housing Act of 1959 [12 U.S.C. § 1701q (1980)] and § 8 of the United States Housing Act of 1937 [42 U.S.C. § 1437f (1978)]; (3) It provides housing for the destitute, elderly, handicapped and disabled; (4) Its tenants are all over 62 years of age and receive substantial rent subsidies from the federal government; and *915 (5) All income from the complex is devoted exclusively to the operation of the apartment for the benefit of its destitute and disabled tenants. Both Bolivar County and the City of Cleveland filed a motion for summary judgment and stated: The circuit judge found the following material facts uncontradicted: (1) Better Living Services, Inc. is a Tennessee nonprofit corporation doing business in Mississippi where it owns and operates a 60 unit apartment complex named South Central Village Apartments in Cleveland, Bolivar County, Mississippi; (2) Taxpayer received during 1987, 1988 and 1989 fair market rent from all tenants; (3) Taxpayer uses rent revenues to pay mortgage payments (balance on the mortgage as of December 31, 1987, was $1,586,126.00); (4) Taxpayer's monthly payment to the deed of trust beneficiary (HUD) includes the amount of the taxes and assessments due on the premises; (5) Taxpayer imposes health requirements, limitations and restrictions on tenant applicants; (6) Taxpayer used a financial screening process to ferret out those potential tenants who qualified for government rent subsidies; (7) Taxpayer's total profit before depreciation in 1987 was $52,276.00; (8) Only $484.00 in expenses for "elderly and congregate services" was reported by taxpayer in 1987; (9) Total revenues in 1987 was $328,500.00; (10) Taxpayer's operational budget supplied by HUD included taxes and special assessment levies; (11) Taxpayer did not furnish or provide a nursing home or facility for the aged or infirm unable to provide independent care for themselves at their own expense; (12) During 1987, 1988 and 1989 all residents paid rent either with personal funds and/or federal subsidies; and (13) Taxpayer furnished low income housing to elderly, handicapped and disabled persons who can care for themselves or who can provide someone to care for them. The circuit court concluded: Miss. Code Ann. § 27-31-1(d) (1972) provides in pertinent part: The taxpayer argues that its operation of low income housing comes within the statutory definition of "charitable society." The taxpayer, through its management company, had at the time of the hearing before the Bolivar County Board similar tax exempt *916 requests pending in the State of Tennessee and was actually receiving tax exempt status in the State of Kentucky on other similar projects. The taxpayer also listed 29 "materially similar" apartment complexes within the State of Mississippi that were receiving tax exempt status. Two decisions of this Court in the 1920's support denial of tax exempt status. In Gunter v. City of Jackson, 130 Miss. 637, 94 So. 844, 845-46 (1923), we said: In Smith v. Myatt, 146 Miss. 388, 111 So. 590 (1927), land owned by Kings Daughters Hospital in Hattiesburg, a charitable organization conducted without profit, was assessed taxes and sold at tax sale. We concluded: In both of these early cases this Court pierced the veil of the religious institution or charitable society and looked at the use being made of the property upon which tax exemption was sought. In both cases, the tax exempt organization had entered into a proprietary function in competition with private enterprise. The same can be said of Better Living's operation of its § 8 apartments in Cleveland. This Court recently said: Rebelwood, Ltd. v. Hinds County, 544 So. 2d 1356, 1365 (Miss. 1989). This Court in Rebelwood held that the value of any federal subsidy or benefits enjoyed by the taxpayer by reason of its ownership of Rebelwood must be considered in establishing true value. This Court included federal supplements in the income in order to correctly assess the property upon the income approach contrary to the claims of the taxpayer. In Currie-Finch Brick &amp; Lumber Co. v. Miller, 123 Miss. 850, 86 So. 579 (1920), this Court stated that the law exempting property will be strictly construed against the *917 exemption and in construing the statute the rule ejusdem generis applies. While tax exempt statutes must be "strictly construed against the exemption ... and all reasonable doubt must be resolved against it," the courts will not ascribe to the legislature an "intention to be unfair and unjust" and will not interpret the exemption statute "to bring about unthought-of results." Bd. of Sup'rs., Warren County v. Vicksburg Hospital, 173 Miss. 805, 816, 163 So. 382, 385 (1935). Property belonging to a charitable society if leased for profit, is taxable under this [Code 1942, Sec. 9697]. Ridgeley Lodge No. 23, I.O.O.F. v. Redus, 78 Miss. 352, 355, 29 So. 163 (1901). After this case was decided by the court below, the legislature passed an act which exempted from taxation the revenues of charitable societies if these revenues were used for fraternal and benevolent purposes. [1900 Miss. Laws 52]. The new act had no application to the case as it was not retroactive. In Senter v. City of Tupelo, 136 Miss. 269, 101 So. 372 (1924), this Court ruled that rent from property owned by a Masonic lodge which was applied to the payment of the balance of the purchase price on the property was not being applied for fraternal and benevolent purposes. Following those rules of construction and guidelines, clearly taxpayer's apartment complex is not a "charitable society" exempted from taxes. The decisions from other states are persuasive and supportive of the circuit judge's decision. An Iowa nonprofit corporation was not granted a property tax exemption for low rent housing facility for elderly persons financed and subsidized in part by 3% Farmers Home Administration under a program to provide financing for housing for low income elderly persons. That court stated: Dow City Senior Citizens Housing, Inc. v. Board of Review of Crawford County, 230 N.W.2d 497, 499 (Iowa 1975). In denying a tax exempt status to the owner of a retirement home for the aged, the court reasoned: Oea Senior Citizens, Inc. v. Douglas County, 185 N.W.2d 464, 470 (Neb. 1971). In Appeal of Sunnyridge Manor, Inc., 106 Idaho 98, 675 P.2d 813, 817 (1984), the court echoed what appears to be the majority rule, "Tax exemptions are disfavored generally, perhaps because they seem to conflict with principles of fairness equality and uniformity in bearing the burden of government." To survive summary judgment, Better Living must establish a genuine issue of material fact by means allowable under the Rule. Lyle v. Mladinich, 584 So. 2d 397 (Miss. 1991). This Court reviews de novo the decision to grant summary judgment. Short v. Columbus *918 Rubber &amp; Gasket Co., 535 So. 2d 61, 65 (Miss. 1988). The evidentiary matters are viewed in the light most favorable to the non-movant. Palmer v. Biloxi Regional Medical Center, Inc., 564 So. 2d 1346, 1354 (Miss. 1990). If triable issues of fact exist, the lower court's decision to grant summary judgment will be reversed; otherwise, the decision is affirmed. Brown v. Credit Center, Inc., 444 So. 2d 358 (Miss. 1983). The circuit court correctly reviewed all evidentiary matters in the record and found that no genuine issue of material fact existed to preclude the granting of summary judgment. Accordingly, the order of the Circuit Court of Bolivar County granting summary judgment is affirmed. AFFIRMED. ROY NOBLE LEE, C.J., HAWKINS and DAN M. LEE, P.JJ., and PRATHER, ROBERTSON, PITTMAN, BANKS and McRAE, JJ., concur.