Opinion ID: 1744374
Heading Depth: 2
Heading Rank: 1

Heading: R.S. Examination Guidelines-Membership and Fraternal Activities, I.R.M. 4.76.17.4.1 (3-1-03)(emphasis provided).

Text: The federal government has narrowly defined certain categories of fraternal organizations that qualify for special tax exemptions as fraternal societies. Certain organizations otherwise considered fraternal do not qualify as fraternal societies unless they operate under a lodge framework or function as a type of insurance or welfare system. However, these organizations qualify as tax exempt under the more general provision exempting all clubs that operate for pleasure, recreation, and other nonprofitable purposes. I.R.C. § 501(c)(7) (emphasis provided). The fraternal purpose of a club that does not qualify as a fraternal society under paragraphs (8) or (10) is still treated as a nonprofitable purpose under paragraph (7). Therefore, an organization like the previously mentioned local Knights of Columbus group could have a qualifying fraternal purpose for the State ad valorem exemption even if the IRS classifies it differently for federal income tax purposes. A fraternal purpose includes a purpose relating or belonging to a fraternity. Black's Law Dictionary, 594 (5th ed.1979). [7] As the court of appeal observed, fraternity is defined as [a] body of people associated for a common interest or purpose and [a] group of people united by similar backgrounds, interests, or occupations. Sherwood Forest Country Club v. Litchfield, 07-989, p. 5 (La.App. 1 Cir. 12/21/07), 978 So.2d 443, 446 ( citing Webster's II New College Dictionary, 485 (1995)) (emphasis provided). Therefore, I agree with the opinion in finding that a common bond must exist among club members apart from their membership in the organization seeking the exemption. As discussed in the opinion, the commonality found in the membership of a fraternal club is reinforced by its activities and rituals. The ritual of initiation for new members in some fraternal organizations is an example of the cohesive bonding that might occur in fraternal clubs. The collective nature of the activities made available by the club to its membership could also support finding a common purpose, because the common purpose of the members would be advanced by the members' collective participation in the activities of the organization. In the present case, the record lacks evidence that the activities of this club occur collectively or are centrally planned, nor is there evidence that supports finding a common purpose among the club members. The members of this club separately participate in a myriad of recreational activities according to their own individual interests, but this is not sufficient proof of a common purpose or common interests among the membership. Additionally, a commonality of interests or backgrounds should be apparent in a fraternal organization. However, there is no apparent evidence of record that the members of this club share common interests, backgrounds, or a common purpose. I agree that a fraternal organization must provide evidence of a commonality among its members apart from their membership in the club itself. The interests, purposes, and backgrounds of the Sherwood Forest Country Club members do not establish a sufficient commonality to justify an exemption under La. Const. art. VII, § 21(B)(1)(a)(i). I write separately to emphasize that I rely on the generally prevailing meaning of fraternal as defined in this concurrence rather than an analysis of federal tax classifications. The classification of the club under the federal exemption scheme is not independently persuasive. While a recreational purpose can overlap with a fraternal purpose, the generally prevailing meaning of fraternal purpose is not broad enough to encompass the myriad of primarily recreational activities occurring at this particular club. Significantly, in the record before us, this club has not provided evidence of a commonality among its members sufficient to support an exemption as a fraternal organization. Accordingly, I additionally concur and agree that the Sherwood Forest Country Club is not entitled to an ad valorem tax exemption under La. Const. art. VII, § 21(B)(1)(a)(i).