Opinion ID: 1783173
Heading Depth: 1
Heading Rank: 1

Heading: The facts are stipulated.

Text: Respondent, the Sunday School Board of the Southern Baptist Convention, is a Tennessee not-for-profit corporation. It is governed by a board of trustees elected by the Southern Baptist Convention and operates under the rules and regulations prescribed by the Convention. Its business affairs must be conducted in accordance with the business and financial plan of the Convention. It is a tax exempt organization under I.R.C. § 501(c)(3) (1976), and contributions to it are deductible under I.R.C. § 170 (1976 & Supp. V 1981) as charitable contributions. Respondent exists, according to its restated corporate charter, to support the Southern Baptist Convention in its task of bringing men to God through Jesus Christ by making available Bibles, lesson courses and materials, books, audiovisuals, music and recordings, and church supplies and by fostering Christian education, Sunday Schools, and service programs which will help the churches to establish, conduct, enlarge, and improve their ministries of Bible teaching and Christian training. Respondent is authorized by its charter to carry on, perform, and do any other act or thing necessary to fulfill these purposes. In furtherance of these purposes respondent's Bookstore Division maintains and operates a network of facilities throughout the United States for the distribution of religious literature and supplies. Among these facilities is the Baptist Book Store at 1017 Grand Avenue in Kansas City. It stocks religious literature and supplies for sale to churches, Sunday schools, and members of the general public. Approximately two-thirds of its sales are to churches and Sunday schools, and approximately onethird are to individuals. Something less than half of the items the Baptist Book Store sells are also carried by commercial retailers. The Baptist Book Store charges prices comparable to those charged by commercial retailers, except that church libraries receive a twenty percent discount. Through the fiscal year ended September 30, 1981, the profit and loss statements of the Baptist Book Store indicated that the store had sustained significant losses for four consecutive years. [2] A breakdown of the figures, however, indicates that for the years 1980 and 1981, the years at issue here, the Baptist Book Store actually generated a small profit. In those years the margin contribution, the amount sales exceeded the cost of sales, was greater than the combined amounts deducted for local operating expenses and the store's proportioned share of the Bookstore Division's expenses. A loss appeared only after deduction of the Baptist Book Store's proportioned share of the general and administrative expenses of the Sunday School Board as a whole. For the years 1980 and 1981 respondent paid an aggregate of $13,612.19 in Jackson County merchants and manufacturers inventory taxes, business personal property taxes, and real property taxes under protest pursuant to § 139.031. It brought this action to recover the amount paid under protest, contending that the Baptist Book Store was exempt from such taxation because it was operating for purposes purely charitable within the meaning of Mo. Const. art. X, § 6 and § 137.100(5). The trial court [found] the issues in favor of the Plaintiff and against the Defendant and entered judgment for an aggregate of $13,612.19 plus costs. From this judgment appellant, the Jackson County Director of Revenue, appeals. We reverse.