Court Opinion

ID: 8908186
Source: CourtListenerOpinion
Date Created: 2022-11-27 02:12:25.478129+00
Date Added: 2024-06-11T17:08:21.400716
License: Public Domain

PHILLIPS, Judge.
In the hearing before the Property Tax Commission, Mecklenburg County contended that the Commission had no jurisdiction to entertain K-Mart’s appeal to it and cross-assigns as error *728the Commission’s ruling to the contrary. The basis for this contention is that G.S. 105-282.1(c) provides that when an owner “demonstrates that the property meets the conditions for exemption, the exemption may be approved by the board at that time.” (Emphasis supplied.) This language, so the County argues, gave the Mecklenburg County Board of Equalization and Review the discretion, as it saw fit, to either grant or deny the application and K-Mart thus had no right to appeal therefrom. This contention is rejected. The plain intent and thrust of G.S. 105-282.1(b), G.S. 105-322, and G.S. 105-324, it seems to us, is to permit a property owner, as a matter of right, to appeal to the Property Tax Commission upon a county or municipal board denying its application for an exemption.
By its sole assignment of error K-Mart contends that the Property Tax Commission’s decision against it is based on findings of fact not supported by evidence and that in any event the law was not properly applied to them. This contention has no merit, in our view, and we overrule it. That the goods were warehoused for transshipment of some kind, as the evidence certainly established, is not dispositive of the case, as appellant apparently contends. For the issue is whether the evidence shows that the warehoused goods were held for transshipment to K-Mart’s customers, as G.S. 105-275(10) provides. If so, they were within the exempted class; but if they were held for transshipment to K-Mart’s stores they were outside the exempted class and therefore subject to taxation. The five findings of fact that K-Mart attacks are those to the effect that the warehoused goods were shipped to the stores either for sale or customer pickup. These findings clearly have evidentiary support and appellant does not really contend that they do not; rather, it is contended that based on the whole record different findings should have been made. We disagree. While the Commission properly found that some goods held in the warehouse were transshipped to K-Mart’s customers, the record would not support a finding that all or even most of the goods were so transshipped to its customers or that the warehouse received the goods for that purpose, as the statute obviously requires. While K-Mart offered no evidence at all as to the amount or percentage of its goods that were transshipped to customers, witnesses on both sides testified that some merchandise was shipped to individual stores for special sales and other *729purposes; that though the stores usually kept only smaller items, some kept larger items as well; that there was no policy requiring the warehouse to hold any items until they were sold to customers, and the stores were free to order and did order items that had not been first ordered by its customers. From our review of the whole record, we believe that the Commission made the findings that should have been made, and we will not disturb them.
K-Mart’s further contention that the Commission erred in applying the law to the findings made is based on the legislative purpose stated in the statute which created the exemption: “The purpose of this classification is to encourage the development of the State of North Carolina as a distribution center.” G.S. 105-275 (10). Though the purpose of the exemption is certainly to encourage merchandizers to establish distribution centers in this state, that neither enlarges the stated scope of the exemption nor dispenses with the necessity of the property owner proving that he is entitled to the exemption. While our Supreme Court said in In re Appeal of Martin, 286 N.C. 66, 209 S.E. 2d 766 (1974), mistakenly relied upon by the appellant, that the phrase “for the purpose of transshipment” must be construed in light of the stated legislative policy, and held that bills of lading for goods shipped into a public warehouse did not have to state that the goods were for transshipment or to bear the name of the ultimate consignee, the Court also recognized that the policy of the statute must be applied in light of the countervailing rule of construction that statutes providing exemption from taxation are strictly construed. “Taxation is the rule; exemption the exception,” Odd Fellows v. Swain, 217 N.C. 632, 637, 9 S.E. 2d 365, 368 (1940), and one claiming an exemption has the burden of establishing that he is entitled to it. Canteen Services v. Johnson, Comr. of Revenue, 256 N.C. 155, 123 S.E. 2d 582, 91 A.L.R. 2d 1127 (1962). The Commission properly concluded that K-Mart failed to establish its right to the exemption. The import of the evidence is not that the goods were held in the warehouse for the “purpose of transshipment” to its “customers,” as the statute provides; its import is that the warehoused goods were held for transshipment to K-Mart stores, as and when the stores requested, a situation that the General Assembly has not yet seen fit to exempt from taxation.
*730Affirmed.
Judges WHICHARD and JOHNSON concur.