Court Opinion

ID: 6759614
Source: CourtListenerOpinion
Date Created: 2022-07-21 00:30:11.555386+00
Date Added: 2024-06-11T16:02:33.584477
License: Public Domain

Holmes, J.,
dissenting. I cannot agree with the majority’s analysis of the relevant statutes and case law as applied to the facts of this case. The clothing exchange appears to be a necessary adjunct to the continued vitality of this school which operates to educate Ohio’s children. The exchange should have received tax-exempt status under the statute. Accordingly, I must dissent.
The school is the successor in interest to two predecessor educational and non-profit organizations which were the College Preparatory School for Girls and the Hillsdale-Lotspeich School. In College Preparatory School for Girls v. Evatt (1945), 144 Ohio St. 408 [29 O.O. 574], paragraph two of the syllabus, we determined such school to be a charitable institution and “used exclusively for charitable purposes.” Since appellant carries out the same educational mission in the same manner, it also should be considered a charitable institution.
The present school is open to the public without regard to race, religion, sex, or nationality. The school charges tuition which is con*189siderably less than the actual cost of the education. In addition, a number of scholarships are regularly bestowed upon particular students. The difference between the cost of education and the tuition is made up from charitable donations to the school. These include cash or negotiables as well as tangible personal property such as books, furniture, appliances and clothing. Like other organizations, appellant utilizes the lot and building at issue to receive, store, display and sell the above kinds of tangibles. All proceeds realized from such sales are utilized to subsidize the school, except for the sales manager’s salary. Therefore, the clothing exchange is an integral part of furthering both the scholarship program and the school’s ongoing fundraising activities.
Under R.C. 5709.121(B), the clothing exchange ought to be considered real property belonging to an educational institution which is used exclusively for charitable or public purposes. The statute provides tax immunity whenever such property is:
“Otherwise made available under the direction or control of such institution, the state, or political subdivision for use in furtherance of or incidental to its charitable, educational, or public purposes and not with the view to profit.” (Emphasis added.)
Without the exchange, tangible gifts received by the school could not be converted into their cash equivalent. It is reasonable to assume that absent the operation of the exchange, tuition for the school’s children would be much higher, which in turn would greatly reduce the number of students who could attend, eliminate scholarships, and diminish the school’s capability to fulfill its educational mission.
Furthermore, the majority’s decision effectively requires one to prove both that the property is functionally related to an exempt use and that it is used directly in furtherance of such exempt use. This directly contravenes the wording of R.C. 5709.121(B) which does not require such narrow prerequisites. I do not believe that this court’s holding in Ohio Masonic Home v. Bd. of Tax Appeals (1977), 52 Ohio St. 2d 127 [6 O.O.3d 343], lends support to the majority here, since the process of converting tangible contributions to liquid assets utilized to meet school costs is no different than the activities of the business office which converts the negotiables into liquid assets. Thus, the exchange should not be viewed as an operation merely for profit, but an operation which is functionally related to the entire educational operation of the school.
Since there is no use “with the view to profit,” I would hold that the school’s clothing exchange facility should be exempted under the above statutes. This reasoning also seems applicable to the issues presented by R.C. 5709.07. Accordingly, I would reverse the decision of the Board of Tax Appeals as to all three statutes.
ion. Sweeney and Douglas, JJ., concur in the foregoing dissenting opin-