Opinion ID: 853199
Heading Depth: 1
Heading Rank: 4

Heading: The Task of Supporting an Exemption

Text: First, the Board found that the Lodge's newsletter made no reference to charitable activities. (Pet. to App. Exh. 4.) This is simply wrong. The 1992 newsletters mention, among other things, a Moose Bar Buck Campaign with a goal of raising $1,000 for Easter Seals, (Appellee's App. at 116), a donation of $1,000 to the local Disabled American Veterans, ( Id. at 121), a campaign to raise $10,000 to repair the city emergency warning system and add a new siren in a section of the city inadequately covered by the existing system, ( Id. at 146), and delivery of food and supplies to victims of Hurricane Andrew, ( Id. at 152). This error is of little significance because the content of the Lodge's newsletter relates to charitable use of the facility only indirectly, if at all. [8] Second and more important, the Board found: The meeting/ballroom is used approximately 1,110 hours per year. The bulk of this time is used for meetings of the Lodge and meetings of the Women of the Moose. The balance of the time used is purely social functionsi.e. Saturday night dances. All these activities are for members and members' families only. [9] (Pet. to App. Exh. 4.) This finding contradicts the hearing officer's analysis, which indicated that seventy-six percent of the total 1992 meeting/ballroom hours were for charitable purposes. (Pet. Exh. 6.) Although the statute directs the Board to base its decision on the hearing officer's report plus any additional evidence taken by the board, and any records that the board considers relevant, Ind.Code Ann. § 6-1.1-30-12 (Burns 1989), the Board did not cite any additional evidence or records that would explain why it rejected the hearing officer's analysis. [10] This finding is therefore more problematic because it is the only Board finding dealing with facility usage, which is necessarily the focus of the predominant use standard. We next turn to the Board's conclusions of law. Finding 5. said, To the extent Lodge facilities are used by others, for whatever reason, the facilities do not qualify for exemption. (Pet. to App. Exh. 4.) This rule is not supported by the case the Board cites [11] or by any other law. [12] See Alte Salems Kirche, Inc. v. State Bd. of Tax Comm'rs, 733 N.E.2d 40, 44 (Ind. Tax 2000) (According to the State Board, `The provision of facilities to other organizations or groups for meetings or gatherings at no cost does not constitute a charitable act.' The State Board is mistaken.). Board Conclusion 8. said: [T]he cases do establish that the annual donation/gross income percentage is of primary consideration in making the [exemption] determination.... The Lodge donates 4% of its revenues to charity. This alone is not adequate to qualify for exemption as charitable. Therefore, the real and personal property owned by the Lodge is 100% subject to property taxation for the March 1, 1992 assessment year. (Pet. to App. Exh. 4.) This misstates and misapplies the law. Although charitable giving might serve as evidence to support claimed charitable use of the facility, the statutory test since 1983 has been predominant use of the facility, not distribution of income for charitable purposes.
[T]he Moose Lodge failed [the predominant use] test because it failed to prove that its facility was used charitably for more than 50% of the time during the relevant tax year. Instead, the Moose Lodge concentrated on showing what percentage of its income it donated to charity. Because it failed to address the proper standard, the Moose Lodge failed to prove its entitlement to exemption. Moreover, nothing in the evidence can be construed to show that the Moose Lodge's facility was used more than 50% of the time for charitable purposes during the relevant tax year. (Appellant's Br. at 6.) This position is disingenuous. The Lodge did indeed focus on the wrong target, but it did so in response to the Board's declarations that in both 1988 and 1992 charitable contribution levels were of primary consideration. (Pet. to App. Exh. 4.) We conclude, as did the Tax Court, that the State Board's refusal of any exemption was an abuse of discretion. C. The Taxpayer's Burden. This leaves us with the question whether, under the facts presented, a taxpayer that has made a misdirected evidentiary showing nonetheless deserves some exemption. The Lodge presented mostly anecdotal evidence, including newsletters that referred to a few charitable projects and a tax return that listed some charitable donations. (Pet. Exh. 4, 9.) It did not offer any sort of log of the time the facility was used in furtherance of these charitable efforts versus total time used. Taxpayers may not avoid their burden of proof by mak[ing] a de minimis showing and then forc[ing] the State Board to support its decisions with detailed factual findings. Hoogenboom-Nofziger v. State Bd. of Tax Comm'rs, 715 N.E.2d 1018, 1025 (Ind.Tax 1999). The Board is therefore correct in saying the Lodge failed to meet its burden under the predominant use standard. D. The Board's Responsibility. Administrative decisions must, however, be based on ascertainable standards in order to be fair and consistent rather than arbitrary and capricious. See State Bd. of Registration for Prof'l Eng'rs v. Eberenz, 723 N.E.2d 422, 429 (Ind.2000) (quoting State Bd. of Registration for Land Surveyors v. Bender, 626 N.E.2d 491, 495-96 (Ind.Ct.App.1993)); see also Boaz v. Bartholomew Consol. Sch. Corp., 654 N.E.2d 320, 323 (Ind.Tax 1995) (Under Indiana's ascertainable standards rule, all administrative decisions must be in accord with previously stated, ascertainable standards.). Such standards give fair warning as to what the agency will consider in making its decision. Podgor v. Ind. Univ., 178 Ind.App. 245, 258, 381 N.E.2d 1274, 1283 (1978) (citations omitted). [13] The statutory focal pointpredominant use of the facilityseems fairly straightforward, and the Board would be fully justified in placing the onus on taxpayers to produce facility usage reports in greater detail and with better supporting documentation than was done here. The Board may not, however, hide the ball by consistently citing charitable giving levels as the primary focus, then arguing for application of a different (albeit correct) statutory standard only on appeal.