Opinion ID: 2068660
Heading Depth: 1
Heading Rank: 4

Heading: use of the parsonage

Text: To assist in determining exemption eligibility under § 77-202(1)(c), the Nebraska Department of Revenue has promulgated regulation 42-006, 316 Neb.Admin.Code, ch. 42, §§ 006.01 through 006.05 (1943), which provides that an exemption is to be allowed only if the property at issue meets all five of the following criteria: (1) The property must be owned by an educational, religious, charitable, or cemetery organization (regulation 42-006.01); (2) the property must be used exclusively for religious, educational, charitable, or cemetery purposes (regulation 43-006.02); (3) the property must not be used for financial gain or profit to either the owner or user (regulation 43-006.03); (4) the property must not be used for the sale of alcoholic liquor for more than 20 hours per week (regulation 43-006.04); and (5) the property must not be owned or used by an organization which discriminates in membership or employment based on race, color, or national origin (regulation 43-006.05). There is no dispute in this case concerning the facts. The Board readily admits that the parsonage satisfies the ownership requirement and agrees that the property is not used for financial gain, for the sale of alcohol, or by a discriminatory organization. The only point of contention is whether the use made of the parsonage constitutes exclusively religious use of the property as required for tax exemption under § 77-202(1)(c). Because the power and right of a state to tax property are presumed, tax exemption provisions are strictly construed, and their operation will not be extended by construction. Bethphage Com. Servs. v. County Board, supra . Property which is claimed to be exempt must clearly come within the provision granting exemption from taxation. Doane College v. County of Saline, 173 Neb. 8, 112 N.W.2d 248 (1961). However, this does not mean that statutory language should not receive a liberal construction to carry out the express legislative intent. Id. In reference to § 77-202(1)(c), this court has held that exclusive use means the primary or dominant use of property, as opposed to incidental use. An exemption will not be lost if the property claimed to be exempt is used in an incidental manner that is not educational, religious, charitable, or cemetery use, as long as the predominant or primary use of the property is one or more of the exempt uses. Bethphage Com. Servs. v. County Board, supra ; Lincoln Woman's Club v. City of Lincoln, 178 Neb. 357, 133 N.W.2d 455 (1965). See, also, Ancient and Accepted Scottish Rite v. Board of County Commissioners, 122 Neb. 586, 241 N.W. 93 (1932). Therefore, the only matter to be determined here is whether the parsonage's exclusive or primary use is religious. This is the first opportunity for this court to address the question of whether a cleric's use of a parsonage constitutes exclusive religious use for exemption purposes. However, in Doane College v. County of Saline , the college president's residence was at issue in the context of tax exemption for educational use. The residence, like the parsonage, was furnished to the president without charge, and he was required to live there as part of his employment contract. Reverend Mullins maintained an office outside of the house, but used one room of the residence, as did the president, as an office where he could work apart from his regular office hours. There are other similarities between the use of the parsonages by United Methodist and the use of the president's house in Doane College v. County of Saline . For example, the president's home was used as housing for prospective faculty members and foreign visitors. Finally, the president's home was also used for meetings, conferences, and receptions. In light of these factors, this court found: The evidence in this case establishes that the president of the college lives in the official residence provided him, not as a matter of personal convenience and advantage but because it is necessary in the discharge of his duties. We think that the primary or dominant use of this property is for educational purposes and the district court was correct in holding it to be exempt. Id. 173 Neb. at 12, 112 N.W.2d at 250. The rule in Doane College v. County of Saline is one applied to parsonages by numerous other jurisdictions. See, Our Savior Lutheran v. Dept. of Revenue, 204 Ill.App.3d 1055, 150 Ill.Dec. 395, 562 N.E.2d 1198 (1990); Seventh-Day Adventists v. Bd. of Tax Com'rs, 512 N.E.2d 936 (Ind.Tax 1987); McKenzie v. Johnson, 98 Ill.2d 87, 74 Ill.Dec. 571, 456 N.E.2d 73 (1983); N. D. Conf. A. of 7th-D. Adv. v. B. of C. Com'rs, 234 N.W.2d 912 (N.D.1975); McCreless v. City of San Antonio, 454 S.W.2d 393 (Tex.1970). The record before us shows that the parsonages are an essential part of the Methodist church, both in their day-to-day activities and within the overall scheme of the itinerant ministry of the Methodist church. The special role parsonages play in the Methodist ministry requires that consideration be given to United Methodist's unequivocal use of the parsonage in the furtherance of its religious purpose. This court has defined religious purpose as the following: Prayer is always worship. Reading the Bible and singing may be worship.    If these exercises of reading the Bible, joining in prayer and in the singing of hymns were performed in a church there would be no doubt of their religious character, and that character is not changed by the place of their performance. People v. Board of Education, 245 Ill. 334, 339 [92 N.E. 251]. See State v. Scheve, 65 Neb. 853 [91 N.W. 846, 93 N.W. 169]. The conclusion follows that neither the profession of a sectarian creed, nor the formal dedication or occupation of property to promote the objects and purposes of a faith thus expressed, is an essential element of a religious use, nor a necessary prerequisite to and of an exclusive religious purpose. Ancient and Accepted Scottish Rite v. Board of County Commissioners, 122 Neb. at 594-95, 241 N.W. at 96. It is clear that the Scotts Bluff parsonage is used to promote the objects and purposes of a faith and would therefore fall under the above definition. Conversely, the Board contends, in substance, that since United Methodist has rented a downtown office for Reverend Mullins which he uses 3 hours a day, the myriad religious activities occurring at the parsonage are merely incidental to the use of the property as a residence. We cannot agree. As the Supreme Court of Oklahoma stated in Immanuel Baptist Church v. Glass, 497 P.2d 757 (Okla.1972), and in the companion case of Eastwood Baptist Church v. Glass, 497 P.2d 761 (Okla.1972), when it exempted from taxation a number of parsonages: `It does not require a resort to the rule of liberal construction to hold that property acquired, owned, and used as is this property, is used exclusively for religious purposes within the meaning of the Constitution and statute. The exemption authorized by the Constitution is not restricted to property used exclusively for public worship, but embraces all property exclusivelythat is, primarilyused for religious purposes....' 497 P.2d at 759. Reverend Mullins' use of the parsonage cannot be distinguished from the president's use of the residence in Doane College v. County of Saline . The issue is whether the parsonage is being owned and used exclusively for religious purposes. The record shows it is being so used. The Board's contention is therefore without merit.