Opinion ID: 900159
Heading Depth: 1
Heading Rank: 5

Heading: Whether a grant of a sixty-seven percent exemption was in error.

Text: [¶ 10.] Having determined the Moose Lodge facilities are not used exclusively for benevolent purposes, the hearing examiner determined the sixty-seven percent exemption granted by Board was appropriate. Moose Lodge contends the exemption does not correspond with the evidence presented at hearing because the only figures presented to the examiner concerned the total square footage of the facility and the square footage occupied by the bar and restaurant. [4] Moose Lodge argues the determination of its partial exemptions was not supported by the evidence presented at hearing and must be made pursuant to the formula set forth in SDCL 10-4-12. [5] We agree. [¶ 11.] SDCL 10-4-12 sets forth the formula for determining the extent of a partial exemption for property owned by a benevolent organization but used for nonexempt purposes: For the purpose of determining the value of the taxable portion of the property, the appraised value of the entire property shall be multiplied by the percentage of the entire property used for other than health care, charitable, benevolent or religious purposes. The resulting value shall be multiplied by the percentage of time such property is used for other than health care, charitable, benevolent or religious purposes. The resulting value shall be the assessed value for taxation purposes. (Emphasis added.) See also Lutherans Outdoors v. Board of Equalization, 475 N.W.2d 140, 143 (S.D.1991) (reiterating the formula as: appraised value of property X percentage of time property is used for non-exempt purposes = taxable value). The shall language of this statute mandates that partial tax exemptions be determined by performing the calculations prescribed by this statutory formula. See Bryant v. Butte County, 457 N.W.2d 467, 470 (S.D.1990) (noting the word shall is regarded as mandatory). See also Appeal of Sioux Valley, 513 N.W.2d at 565; Lutherans Outdoors, 475 N.W.2d at 143. [¶ 12.] The hearing examiner determined Moose Lodge was entitled to a sixty-seven percent tax exemption, in part based on a Board policy to tax mixed-use property of benevolent organizations at a predetermined rate of thirty-three percent, and in part based on the square footage attributed to the bar and restaurant area. [6] Neither of these factors are included in the statutory formula for determining the extent of a partial exemption. SDCL 10-4-9.2. The legislature has set forth a specific formula for determining partial tax exemptions for benevolent organizations. Insofar as Board's policy simply assigns a uniform partial exemption for mixed-use property of benevolent organizations, without adhering to this formula, the policy does not conform with the statutory mandates of SDCL 10-4-12. The record presented for our review is void of any evidence concerning the appraised value of Moose Lodge's property, the percentage of property used for nonexempt purposes or the percentage of time the property is used for nonexempt purposes. Absent these statutorily required figures, a calculation of Moose Lodge's partial tax exemption is impossible. SDCL 10-4-12; Appeal of Sioux Valley, 513 N.W.2d at 565; Lutherans Outdoors, 475 N.W.2d at 143. Accordingly, we remand the determination of Moose Lodge's partial tax exemption for recalculation in accordance with SDCL 10-4-12. [¶ 13.] Affirmed in part and remanded in part. [¶ 14.] SABERS, AMUNDSON, KONENKAMP and GILBERTSON, JJ., concur.