Opinion ID: 2592913
Heading Depth: 4
Heading Rank: 1

Heading: Catholic Health's waiver of charitable exemption

Text: We do not believe Catholic Health's self-described waiver of its charitable exemption claim requires us to adopt its interpretation of the tax exemption. Catholic Health interprets the code as offering two distinct types of exemptions  one for religious organizations which, if they enjoy 501(c)(3) status, are entitled to an exemption for all taxes incurred in the conduct of their regular religious ... functions and activities, and a separate exemption for charitable organizations, which, in addition to being 501(c)(3) organizations, must also meet the far stricter guidelines of the third paragraph of the definition before they will be entitled to exemptions for their regular ... charitable functions and activities. Thus, Catholic Health understood its waiver as electing to pursue only the religious exemption claim. However, under the City of Pueblo's interpretation of its code, such a waiver is problematic, for one of two reasons. First, the code may disallow any waiver of the charitable exemption argument, because all exemptions for religious organizations fall within the broader category of charitable organization exemptions. Second, the code could be seen to accommodate a waiver, but only insofar as it signifies a party's self-identification with one type of organization entitled to an exemption if the necessary prerequisites are met  in this case, opting to identify as a religious organization, while still recognizing the applicability of the definition's third paragraph. Catholic Health's waiver is based on its incorrect interpretation of the tax code. Given our understanding of the code, we presume Catholic Health intended its waiver to merely clarify its identification as a religious organization, rather than a waiver of its entire claim.