Court Opinion

ID: 9664398
Source: CourtListenerOpinion
Date Created: 2023-08-24 00:18:20.866289+00
Date Added: 2024-06-11T18:15:06.035800
License: Public Domain

Shanahan, J.
BACKGROUND FOR APPEAL
For the purpose of property taxation, the Nebraska State Bar Foundation (Bar Foundation) is the owner of real property designated as the “Roman Hruska Law Center” (Law Center) in Lancaster County, Nebraska. In its tax exemption application for 1984, the Bar Foundation asserted that 56.3 percent of the Law Center, that is, the part of the Law Center claimed to be used for educational and charitable purposes, was *3exempt from property taxation. After the board of equalization for Lancaster County (county board) disapproved the application, the Bar Foundation appealed to the district court for Lancaster County and contended that part of the Law Center was tax-exempt, since the center was partially used for charitable and educational purposes and the foundation held the Law Center in trust for the Nebraska State Bar Association, which was “created by the Supreme Court of Nebraska by state action to serve the public purpose.”
The district court found that the Bar Foundation was “not a charitable organization; that is to say, ‘. . . an organization operated exclusively for the purpose of the mental, social or physical benefit of the public or an indefinite number of persons.’ ” The court also found that the Bar Foundation was not an “educational organization” and that the Law Center was not “property of the state and its governmental subdivisions.” Consequently, the court determined that the Bar Foundation was not entitled to a tax exemption for the Law Center and affirmed the county board’s decision, which had denied the foundation’s tax exemption application.
In its appeal, the Bar Foundation contends that part of the Law Center, as property used for “charitable” and “educational” purposes, is exempt from taxation pursuant to Neb. Rev. Stat. § 77-202(l)(c) (Cum. Supp. 1984) and that the Law Center, as governmental property, is tax-exempt in accordance with § 77-202(l)(a), all pertaining to the years 1984 to 1987, inclusive.
STANDARD OF REVIEW;
TAXPAYER’S BURDEN OF PROOF
In an appeal from a district court’s judgment on the question whether property is tax-exempt, an appellate court determines a tax exemption question de novo on the record and reaches a conclusion independent of the findings of the trial court, provided, when credible evidence is in conflict on a material issue of fact, the appellate court considers, and may give weight to, the fact that the trial judge heard and observed the witnesses and accepted one version of the facts rather than another. Bethphage Com. Servs. v. County Board, 221 Neb. 886, 381 *4N.W.2d 166 (1986). See, also, Ev. Luth. Soc. v. Buffalo Cty. Bd. of Equal., 230 Neb. 135, 430 N.W.2d 502 (1988); Immanuel, Inc. v. Board of Equal., 222 Neb. 405, 384 N.W.2d 266 (1986); Matzke v. Board of Equalization, 167 Neb. 875, 95 N.W.2d 61 (1959); Neb. Rev. Stat. § 77-1511 (Reissue 1990).
“ [T]ax exemption provisions are strictly construed, and their operation will not be extended by construction. . . . Property which is claimed to be exempt must clearly come within the provision granting exemption from taxation.” Bethphage Com. Servs. v. County Board, supra at 889, 381 N.W.2d at 169. Accord Indian Hills Comm. Ch. v. County Bd. of Equal., 226 Neb. 510, 412 N.W.2d 459 (1987). “Since a statute conferring an exemption from taxation is strictly construed, one claiming an exemption from taxation of the claimant or the claimant’s property must establish entitlement to the exemption.” Nucor Steel v. Leuenberger, 233 Neb. 863, 867, 448 N.W.2d 909, 912 (1989); Bethphage Com. Servs. v. County Board, supra.
NEBRASKA’S STATUTE FOR TAX-EXEMPT PROPERTY
Originally, the constitutional provision for property tax exemption appeared in 1875 as article IX, § 2, of the Nebraska Constitution:
The property of the state, counties and municipal corporations, both real and personal, shall be exempt from taxation, and such other property as may be used exclusively for agricultural and horticultural societies, for school, religious, cemetery and charitable purposes, may be exempted from taxation, but such exemptions shall be only by general law.
Hence, the initial statute for the charitable and educational exemptions from property taxation was Comp. Stat. § 4934 (1903), which provided in part: “The following property shall be exempt from taxes: First — All property of the state, counties, and municipal corporations. Second — Such other property as may be used exclusively for agricultural and horticultural societies, for schools, religious, cemetery and charitable purposes.”
As the result of a constitutional amendment in 1920, the *5genesis for property tax exemption is Neb. Const, art. VIII, § 2, which, pertinent to the present appeal, provides:
The property of the state and its governmental subdivisions shall be exempt from taxation. The Legislature by general law may exempt . . . property owned and used exclusively for educational, religious, charitable, or cemetery purposes, when such property is not owned or used for financial gain or profit to either the owner or user.
Consequently, in 1921, the Legislature amended the property tax exemption statute to provide in part:
The following property shall be exempt from taxes:
(1) The property of the state and its governmental subdivisions.
(2) Property owned by and used exclusively for agricultural and horticultural societies, and property owned and used exclusively for educational, religious, charitable or cemetery purposes, when such property is not owned or used for financial gain or profit to either the owner or user.
Comp. Stat. § 5821 (1922).
Insofar as questions in this appeal are concerned, Nebraska’s Revised Statutes of 1943 retained the provisions of the 1921 statute:
The following property shall be exempt from taxes:
(1) The property of the state and its governmental subdivisions;
(3) Property owned and used exclusively for educational, religious, charitable or cemetery purposes, when such property is not owned or used for financial gain or profit to either the owner or user____
§ 77-202(1943).
In 1980, § 77-202 was amended to provide:
(1) The following property shall be exempt from taxes: (a) The property of the state and its governmental subdivisions;
(c) Property owned by educational, religious, *6charitable, or cemetery organizations and used exclusively for educational, religious, charitable, or cemetery purposes, when such property is not owned or used for financial gain or profit to either the owner or user----
(Amendatory new language emphasized.) § 77-202(l)(a) and (c) (Reissue 1981).
The Legislature, in 1984, again amended § 77-202:
(1) The following property shall be exempt from taxes: (a) The property of the state and its governmental subdivisions;
(c) Property owned by educational, religious, charitable, or cemetery organizations and used exclusively for educational, religious, charitable, or cemetery purposes, when such property is not (i) owned or used for financial gain or profit to either the owner or user, (ii) used for the sale of alcoholic liquors for more than twenty hours per week, or (iii) owned or used by an organization which discriminates in membership or employment based on race, color, or national origin. For purposes of this subdivision, educational organization shall mean an institution operated exclusivelyfor the purpose of offering regular courses with systematic instruction in academic, vocational, or technical subjects or a museum or historical society operated exclusively for the benefit and education of the public, and charitable organization shall mean an organization operated exclusively for the purpose of the mental, social, or physical benefit of the public or an indefinite number of persons....
(Amendatory new language emphasized.) § 77-202(l)(a) and (c) (Cum. Supp. 1984).
After the 1984 amendment, subparts (a) and (c) of § 77-202(1) have remained unchanged. See § 77-202 (Reissue 1990).
NEBRASKA STATE BAR FOUNDATION

Nature of Organization.

The Nebraska State Bar Foundation was incorporated in 1963 as a Nebraska nonprofit corporation to obtain gifts and *7contributions for the purposes expressed in the foundation’s articles of incorporation, namely:
(a) To advance the science of jurisprudence;
(b) To promote and improve the administration of justice;
(c) To uphold high standards for the judiciary and for lawyers;
(d) To facilitate understanding of and compliance with the law, and to promote the study of law, research therein, and the diffusion of knowledge thereof;
(e) To cause to be published and to distribute addresses, reports, treatises and other literary works on legal subjects, and to acquire, preserve and exhibit rare books and documents, objects of art, and items of historical interest having legal significance or bearing on the administration of justice; and
(f) To do and perform all acts and things which are legitimate and are reasonably calculated to promote the interests and carry out the purposes of this organization.
Also, the Bar Foundation’s articles of incorporation provide:
No part of the income or assets of this organization shall inure to the benefit of any member, officer or director, or private individua!; and none of the activities, funds, property, or income of the Foundation may be used in carrying on any propaganda or political activity, directly or indirectly, or in attempting to influence legislation, either directly or indirectly, and neither the Foundation nor its officers or directors may, as such officers or directors of the Foundation, contribute to or otherwise support or assist any political party or candidate for elected public office.
To become a member of the Bar Foundation, one must be among the “active membership” of the Nebraska State Bar Association and must have contributed to the foundation. A 20-member board of directors elected from the foundation’s membership conducts the foundation’s activities and serves without compensation, although the foundation is authorized to pay reasonable compensation for services rendered by *8persons other than the foundation’s board of directors. Under I.R.C. § 501(c)(3) (1982), the Bar Foundation, as a “publicly supported organization,” is exempt from federal income taxation. Also, contributions to the foundation are deductible as donations to a charitable organization.

Activities of Bar Foundation.

Among the Bar Foundation’s early activities, and “one of the original goals” of the foundation, was fund raising for construction of a headquarters building for the Nebraska State Bar Association. Eventually, the Bar Foundation constructed the Law Center, in which law-related organizations occupy 56.3 percent of the center’s usable floorspace, namely: the Bar Foundation occupies 13 percent; the Nebraska State Bar Association, 35.8 percent; and Nebraska Continuing Legal Education, 7.5 percent. The Nebraska State Bar Association and Nebraska Continuing Legal Education pay rent to the Bar Foundation for their floorspace in the Law Center. The remaining 43.7 percent of the Law Center’s floorspace is leased to tenants unassociated with law-related activities.
Among its specific activities, the Bar Foundation has supplied “seed money” for Nebraska Continuing Legal Education, that is, initial funding for commencement of that educational corporation, and has made annual grants to Nebraska Continuing Legal Education since its inception. The Bar Foundation funded a “Student Legal Services Handbook” for the Association of Students of the University of Nebraska, a publication “[t]o provide students with general information on areas of law that most frequently concern them. [The handbook] is written to inform rather than advise, the hope being that students who have an awareness of their legal rights will seek the advice of an attorney regarding a specific legal problem.” Also, foundation funding was used for the “Nebraska Annotations to the Restatement (Second) of Trusts” and the “Annotation and Restatement of Torts.” Additionally, the Bar Foundation supplied or committed funds for a study of the Nebraska court system, the publication of a “Consumer’s Guide to Nebraska Law,” a conference of state Supreme Court justices and court administrators, and a writing contest in *9Nebraska relative to the Bicentennial of the U.S. Constitution.
NEBRASKA STATE BAR ASSOCIATION
The Nebraska State Bar Association (NSBA) was incorporated as a Nebraska nonprofit corporation in 1976 and operates under supervision of the Supreme Court of the State of Nebraska. NSBA’s purposes are
to improve the administration of justice; to foster and maintain high standards of conduct, integrity, confidence and public service on the part of those engaged in the practice of law; to safeguard and promote the proper professional interests of the members of the Bar; to provide improvements in the education and qualifications for admission to the Bar, and for the study of the Science of Jurisprudence and Law Reform, and the continuing legal education of the members of the Bar; to improve the relations of the Bar with the public; to carry on a continuing program of legal research; and to encourage cordial relations among the members of the Bar; all to the end that the public responsibilities of the legal profession may be more effectively discharged.
Every lawyer licensed to practice in the State of Nebraska must be a member of NSBA, which also includes judges.
Located in the space rented by NSBA are offices for various bar-related activities or functions, for example, the Counsel for Discipline, who, in accordance with rules promulgated by the Supreme Court of the State of Nebraska, is involved in enforcement of the Code of Professional Responsibility for lawyers and the disciplinary process of lawyers; the Nebraska State Bar Commission, which offers recommendations to the Supreme Court of the State of Nebraska regarding applications to practice law in Nebraska and which is responsible for preparing and grading part of the bar examinations for admission to practice law in Nebraska; Legal Services, which affords some “pro bono” legal services to indigent clients and maintains a lawyer-referral program; Nebraska Lawyers Trust Account Foundation, or “IOLTA” (Interest on Lawyers Trust Accounts), which provides funds for legal services to indigents; and Law-Related Education, which informs the public about *10“concepts oflaw
NEBRASKA CONTINUING LEGAL EDUCATION
Nebraska Continuing Legal Education (NCLE) is a Nebraska nonprofit corporation which provides
an educational program for the study, discussion and dissemination of information relating to the laws of the State of Nebraska, United States of America, the several States thereof, and governmental units and organizations inferior to or related to any of them, and international law, for members of the Nebraska State Bar Association and interested persons not members of such Association.
NCLE’s board of directors reviews the “particular needs of the legal profession” regarding education and “the kinds of programs [that] would most benefit the legal profession.” Thereafter, NCLE conducts seminars or lectures in areas “of importance to the legal profession.” Although nonlawyers sometimes attend NCLE seminars of particular interest, for instance, a seminar on school law, seminar attendance by nonlawyers is “the exception rather than the rule.”
FEDERAL TAX EXEMPTION
The Bar Foundation points to its federal tax exemption as a charitable organization under § 501(c)(3) of the Internal Revenue Code and suggests that the federal exemption is “highly relevant” to the question concerning property exemption under § 77-202(l)(c) (Cum. Supp. 1984). Brief for appellant at 20. A property owner’s exemption from federal income taxation does not determine whether the owner’s property is tax-exempt under state law. New Canaan Academy v. Town of Canaan, 122 N.H. 134, 441 A.2d 1174 (1982); Ladies Club v Grand Rapids, 409 Mich. 748, 298 N.W.2d 422 (1980); Eyring Research Institute v. Tax Com’n of Utah, 598 P.2d 1348 (Utah 1979); Council Rock School Dist. v. G.D.L. Plaza, 91 Pa. Commw. 176, 496 A.2d 1298 (1985); NRA Spec. Contribution Fund v. Bd. of Cty. Com’rs, 92 N.M. 541, 591 P.2d 672 (1979); AWWA v. Board of Assessment Appeals, 38 Colo. App. 341, 563 P.2d 359 (1976). Reasons for the preceding proposition are not only the different types of taxes levied, but also imposition of taxes by two distinct and autonomous *11governmental authorities. Therefore, tax-exempt status of the Bar Foundation’s property is determined by Nebraska law irrespective of federal law governing exemption from income taxation.
PROPERTY OF A CHARITABLE ORGANIZATION
As disclosed by the examination of Nebraska’s earliest statute for tax-exempt property and subsequent exemptive statutes, legislation for tax-exempt property demonstrates a discernible and deliberate pattern of statutory evolution. Initially, only the property’s exclusive use was the controlling factor in determining whether property was exempt. Comp. Stat. § 4934 (1903). In 1921, while a property’s exclusive use for a charitable or educational purpose remained a factor in tax exemption, for the first time ownership of property became a determinant for tax exemption, although ownership was nondescript, since a particular nature, character, or status of the property owner was unspecified in either the 1921 amendment or the immediately subsequent § 77-202(3) (1943). Thus, property use was the focal point for exemption from property taxation. For that reason, this court, construing availability of the “charitable” and “educational” exemptions under § 77-202(3) (1943), commented that “in determining whether or not property is within a tax exemption provision, the use of the property and not the status or character of the owner of the property controls.” Nebraska Conf. Assn. Seventh Day Adventists v. County of Hall, 166 Neb. 588, 598, 90 N.W.2d 50, 55 (1958). In consideration of § 77-202(1)(c) (Reissue 1971), this court stated: “It is the primary or dominant use, and not an incidental use, of the property which is controlling in determining whether property is exempt from taxation ...” Bethesda Foundation v. County of Saunders, 200 Neb. 574, 577, 264 N.W.2d 664, 666 (1978). Accord, Lincoln Woman’s Club v. City of Lincoln, 178 Neb. 357,133 N.W.2d 455 (1965); Doane College v. County of Saline, 173 Neb. 8, 112 N.W.2d 248 (1961). Drawing from those preceding “use” decisions, the Bar Foundation maintains that under § 77-202(1)(c) (Cum. Supp. 1984), “the controlling factor is the primary or dominant use, not any incidental use.” Brief for appellant at 13. Regarding the *12Bar Foundation’s decisional support for its “controlling factor” test, the precedential value of a decision containing judicial construction of a statute may, and probably does, diminish when the construed statute is subsequently amended in reference to the statutory language which was the subject of the prior interpretative decision. Cf. State v. Schaaf, 234 Neb. 144, 449 N.W.2d 762 (1989) (interpretative precode decisions may have little value in construing the Nebraska Criminal Code).
Continuing on our statutory trek through the charitable and educational exemptions from property taxation, in 1980, § 77-202 was amended, so that the specific nature, character, or status of the property owner became a factor in determining whether property was tax-exempt, that is, the property must be “owned by [an] educational, religious, [or] charitable” organization. § 77-202(l)(c) (Reissue 1981). Thus, through the 1980 amendment, a property owner’s nature, character, or status became a determinative factor considered with the additional requirements that the property be used for statutorily specified purposes and not owned or used for financial gain or profit to the property’s owner or user.
Notwithstanding the 1980 amendment of § 77-202(l)(c), there remained a question for courts: What is a “charitable organization” in reference to tax-exempt property?
In Scottish Rite Building Co. v. Lancaster County, 106 Neb. 95, 98, 182 N.W. 574, 575 (1921), this court characterized “charity” as that “actually done for the relief of the unfortunate and the alleviation of suffering, or in some work of practical philanthropy, as contrasted with the sentimental or ethical viewpoint.” In Young Men’s Christian Ass’n v. Lancaster County, 106 Neb. 105, 111, 182 N.W. 593, 595 (1921), “charity” was characterized as “something more than mere alms-giving or the relief of poverty and distress, and [as having] a significance broad enough to include practical enterprises for the good of humanity operated at a moderate cost to those who receive the benefits.” Accord Lincoln Woman’s Club v. City of Lincoln, supra.
Still other definitions of “charity” are found in this court’s decisions such as United Community Services v. The Omaha *13Nat. Bank, 162 Neb. 786, 791, 77 N.W.2d 576, 582 (1956), wherein “charity” meant
“a gift, to be applied consistently with existing laws, for the benefit of an indefinite number of persons, by bringing their hearts under the influence of education or religion, by relieving their bodies from disease, suffering, or constraint, by assisting them to establish themselves for life, or by erecting or maintaining public buildings or works or otherwise lessening the burdens of government.”
(Quoting from 10 Am. Jur. Charities § 3 (1937).)
Eventually, in United Way v. Douglas Co. Bd. of Equal. ,215 Neb. 1, 337 N.W.2d 103 (1983), this court indicated that the charitable exemption under § 77-202(1)(c) was based on a benefit to the public generally and elimination of services which the state would otherwise have to perform in response to its governmental duties. Cf. St. Louis Union Trust Company v. United States, 374 F.2d 427, 432 (8th Cir. 1967) (a reason for the charitable exemption is that “the favored entity performs a public service and benefits the public or relieves it of a burden which otherwise belongs to it”).
One commentator has observed:
Exemption of charitable property flows from the concept that property used for public activities and functions should not be taxed. Hence it follows that because charitable property renders a public service and is used for public functions it should be tax exempt. Formulated in terms of the so-called governmental theory of tax exemption, private charities perform functions that the state would be required to undertake and tax exemption is granted as a quid pro quo for the performance of these functions and services. Many courts expand the governmental doctrine into the humanitarian theory under which tax exemption is justified not only for the performance of functions which relieve the state of its burden but also for activities which further socially desirable objectives considered of benefit to the community. These differing theories of tax exemption of charitable property have, to a considerable extent, been responsible for the lack of uniformity which has
*14traditionally characterized the case law in this area.
E. Fisch, D. Freed & E. Schachter, Charities and Charitable Foundations § 787 at 602-03 (1974). As the court noted in Child v. United States, 540 F.2d 579, 583 (2d Cir. 1976):
Relief of general tax burdens alone, in a society with some progressivity in its tax structure, cannot be deemed a single, inalienable mark of charity.
Our view is that relief for the public fisc is more symptomatic than evidentiary regarding whether an activity is charitable: charity often results in an absorption of a burden otherwise falling upon the state, particularly where the social welfare is a principal purpose of the state. But this does not mean that activities lessening public expense in any of a myriad of areas of public interest are perforce charitable.
In an attempt to eliminate confusion or uncertainty in a definition or characterization of “charitable organization,” the Legislature in 1984 amended § 77-202(l)(c) by providing: “[CJharitable organization shall mean an organization operated exclusively for the purpose of the mental, social, or physical benefit of the public or an indefinite number of persons . . . .” Therefore, for tax-exempt status pursuant to § 77-202(l)(c) (Cum. Supp. 1984), property must: (1) be owned by a type of organization designated in § 77-202(l)(c); (2) be used exclusively for at least one of the purposes specified in § 77-202(l)(c), i.e., an educational, religious, charitable, or cemetery purpose; and (3) not be (a) owned or used for financial gain to the property owner or user, (b) used more than 20 hours per week for sale of alcoholic liquors, or (c) owned or used by an organization which, on the basis of race, color, or national origin, discriminates in membership or employment. See, Ev. Luth. Soc. v. Buffalo Cty. Bd. of Equal., 230 Neb. 135, 430 N.W.2d 502 (1988); Immanuel, Inc. v. Board of Equal., 222 Neb. 405, 384 N.W.2d 266 (1986). We again note that § 77-202(1)(c) (Cum. Supp. 1984) is the same as the current tax exemption statute, § 77-202(1)(c) (Reissue 1990).
Thus, § 77-202(1)(c) contains a two-tier approach to tax exemption for property. At the first tier is the particular nature, character, or status of a property owner as an organization *15which is one of the types designated in § 77-202(1)(c). At the second tier is use of the property, that is, the specific kinds and degrees of use which qualify or disqualify property concerning the charitable or educational tax exemptions available under § 77-202(1)(c). At the first tier, if an owner is not an organization of a type entitled to property tax exemption pursuant to § 77-202(1)(c), continuation to the second tier, namely, consideration of the property’s use, is unnecessary, since the property owner has failed to qualify as an organization entitled to tax exemption for its property. In this manner, through a series of amendments to statutes authorizing tax exemption of property owned by certain types of organizations, the Legislature, by narrowing the definitions for “charitable organization” and “educational organization,” has systematically and intentionally broadened the property tax base through limited availability of property tax exemption under § 77-202(1)(c).
Consequently, the next question is whether the Bar Foundation, as owner of the Law Center, is a charitable organization within § 77-202(1)(c), that is, an organization operated exclusively for the purpose of the mental, social, or physical benefit of the public or an indefinite number of persons.
“Operated exclusively,” in reference to a charitable organization within § 77-202(l)(c), means an organization’s primary or predominant activity. See, Bethphage Com. Serv. v. County Board, 221 Neb. 886, 381 N.W.2d 166 (1986); Lincoln Woman’s Club v. City of Lincoln, 178 Neb. 357, 133 N.W.2d 455 (1965); Ancient and Accepted Scottish Rite v. Board of County Commissioners, 122 Neb. 586, 241 N.W. 93 (1932).
Regarding “mental” benefit of the public, as one of the requisite purposes of a charitable organization within § 77-202(1)(c), “mental” means “intellectual,” see Webster’s Third New International Dictionary, Unabridged 1411 (1981), which in turn means, among other things, “engaged in creative literary, artistic, or scientific labor.” Id. at 1174.
Applying the preceding definition of “mental” to the Bar Foundation’s primary or predominant activity, the Bar Foundation is not operated for generation of literary, artistic, *16or scientific benefit to the general public.
However, might the Bar Foundation’s primary or predominant activity relate to the mental benefit of “an indefinite number of persons”? Relative to a charitable organization within § 77-202(1)(c), “an indefinite number of persons” means a group of persons with a common characteristic, that is, a class, uncertain in number and composed from the public at large or a community. See, Lynch v. Spilman, 67 Cal. 2d 251, 431 P.2d 636, 62 Cal. Rptr. 12 (1967); Am. Soc.for Test.& M. v. Bd. of Rev. of Taxes, 423 Pa. 530, 225 A.2d 557 (1967); Continental Illinois Bank v. Harris, 359 Ill. 86, 194 N.E. 250 (1934); Ancient and Accepted Scottish Rite v. Board of County Commissioners, supra.
Generally, the public cannot, except in extremely limited situations, act as lawyers in Nebraska without a license to practice law. Therefore, if we assume that the Bar Foundation operates primarily or predominantly to provide a “mental benefit” to a class, the benefited class is not composed from the public at large or from a community. Rather, the class which benefits from the Bar Foundation’s primary or predominant activity is the membership of the NSBA, a restricted group of persons with a common characteristic — a license to practice law in the State of Nebraska. The Bar Foundation’s other operations are basically law-related activities such as providing grants for continuing education of lawyers and funding for legal publications, for example, “Nebraska Annotations to the Restatement (Second) of Trusts,” activities which benefit a restricted class, namely, lawyers, and not a class composed from the public at large.
Since there is no evidence that the Bar Foundation’s operations confer any social or physical benefit on the general public or an “indefinite number of persons,” as that phrase is used in § 77-202(l)(c), we reach the same conclusion as that reached by the district court: The Bar Foundation is not a charitable organization within § 77-202(l)(c) (Cum. Supp. 1984).
EDUCATIONAL ORGANIZATION
Section 77-202(1)(c) also contains a definition or *17characterization of an “educational organization,” that is, “an institution operated exclusively for the purpose of offering regular courses with systematic instruction in academic, vocational, or technical subjects ...” There is no evidence whatsoever that the Bar Foundation is an institution with the primary or predominant activity of offering regular courses with systematic instruction in academic, vocational, or technical subjects. Hence, we conclude, as did the district court, that the Bar Foundation is not an educational organization within § 77-202(1)(c).
TAX EXEMPTION CLAIM UNDER § 77-202(l)(c)
Therefore, since the Bar Foundation is neither a charitable organization nor an educational organization within the statutory definitions contained in § 77-202(1)(c), the Bar Foundation is not entitled to tax exemption of the Law Center pursuant to § 77-202(1)(c).
GOVERNMENTAL PROPERTY EXEMPTION UNDER § 77-202(1)(a)
The property of the State of Nebraska and its governmental subdivisions is exempt from property taxation. § 77-202(l)(a).
As the basis for another exemption of the Law Center, the Bar Foundation alleges:
Section 77-202 further provides that the property of the state and its governmental subdivisions shall be exempt from taxes. The Nebraska State Bar Foundation holds title to the subject property in trust for the Nebraska State Bar Association which is an integrated state bar created by the Supreme Court of Nebraska by state action to serve the public purpose. The Nebraska State Bar Association and its trustee, the Nebraska Bar Foundation constitute a governmental instrumentality which is exempt from taxation.
In its application, filed with the county assessor and later heard before the county board, the Bar Foundation sought tax exemption for part of the Law Center under the charitable and educational exemptions of § 77-202(l)(c), that is, exemption of the Law Center’s floorspace occupied by the Bar Foundation, NSBA, and NCLE, or exemption of 56.3 percent of the Law *18Center.
At the hearing before the county board, much of the discussion and information related to whether the Law Center was used “exclusively for charitable and educational purposes” and whether NSBA was a “charitable organization.” After receipt of information bearing on the Bar Foundation’s application for tax exemption of the Law Center, the county board voted in October 1984 to “disallow the exemption application for the Nebraska State Bar Foundation for educational and charitable purposes,” a decision which the Bar Foundation appealed immediately.
The Bar Foundation, in its amended petition filed in 1987, renewed its allegations about the “charitable” and “educational” aspects of the Bar Foundation, NSBA, and NCLE, but additionally alleged that the foundation held title to the Law Center in trust for “the Nebraska State Bar Association which is an integrated bar created by the Supreme Court of Nebraska by state action to serve the public purpose.” In its appeal to this court, the Bar Foundation contends:
It is the Nebraska State Bar Association that assists the Supreme Court in carrying out its responsibilities as a branch of government in Nebraska. There is no other State agency which assists the Supreme Court in carrying out these responsibilities____
The inescapable conclusion is that governmental functions are undertaken from within the Law Center building. The Supreme Court created the Bar Association to assist it in carrying out its judicial functions. This assistance requires office space and that necessary office space is in the Law Center.
Brief for appellant at 31.
The county board has never objected to the district court’s considering whether the Law Center is governmental tax-exempt property, but maintains that the Law Center is not property owned by either the State of Nebraska or a political subdivision of the state.
While each party in this appeal directs our attention to decisions which tend to support its respective position on tax exemption of governmental property, both the Bar Foundation *19and the county board overlook an important and dispositive procedural point in this case.
An appeal from a decision by a county board of equalization is authorized by Neb. Rev. Stat. § 77-1510 (Reissue 1990) and is controlled by § 77-1511, which in part provides that “[t]he district court shall hear appeals and cross appeals taken under section 77-1510 as in equity and without a jury, and determine anew all questions raised before the county board of equalization which relate to the liability of the property to assessment, or the amount thereof.” The foregoing statutes are verbatim successors to their prior statutory counterparts pertaining to appeals from a decision by a county board of equalization.
In Gordman Properties Co. v. Board of Equal., 225 Neb. 169, 403 N.W.2d 366 (1987), Gordman Properties Company, as appellant in the district court, attempted to raise an issue concerning uniformity and proportionality of valuation regarding Gordman’s property, an issue which was never raised before the county board of equalization, since the board considered only Gordman’s tax protest to an increase in the actual value of Gordman’s property. In Gordman, we not only recognized that the district court lacked jurisdiction to resolve any question involving uniformity and proportionality of valuation for Gordman’s property, but also made some observations and statements worth repeating in the present appeal:
Referring to a statutory predecessor substantially the same as the current § 77-1511, this court observed in Reimers v. Merrick County, 82 Neb. 639, 640, 118 N.W. 113, 114 (1908): “The legislature, in the section of the revenue law referred to, has seen fit to restrict the district court on such appeal to a consideration of the questions raised before said board, and the court is without power to adjudicate any other issue in that proceeding.” See, also, State Bank v. Seward County, 95 Neb. 665, 146 N.W. 1046 (1914); Brown v. Douglas County, 98 Neb. 299, 152 N.W. 545 (1915).
This court has advanced two explanations or reasons for the restriction on issues or questions which can be tried *20in the district court in a taxpayer’s appeal from action of a county board of equalization.
In Reichenbach Land & Loan Co. v. Butler County, 105 Neb. 209, 211, 179 N.W. 1015, 1016(1920), this court noted: “The local board had ample power in the first instance to correct any error in the official action of the assessor, and the question for review should have been pointed out in some form. In considering the interests of the taxpayers of an entire county and of the public at large, in examining numerous items and in determining the value of property in different forms for the purpose of taxation, the county board of equalization is entitled to a specific complaint, and should have an opportunity to pass on the question for ultimate decision before the public revenues become involved in protracted or vexatious litigation. On appeal to the district court the questions for review are limited to the questions presented to the county board of equalization. This is the public policy of the state____”
The district court’s restricted scope of inquiry in a taxpayer’s appeal from action by a board of equalization was also discussed in Nebraska Telephone Co. v. Hall County, 75 Neb. 405, 407, 106 N.W. 471 (1906), where this court stated: “[T]he reason for the limitation is obvious. If a taxpayer could present a question to the board which was without merit, and, after a determination of that question against him, could appeal to the district court and there present another and different question, a meritorious one, which required a different ruling, he could always overturn the assessment, and thus escape taxation of his property altogether.”
225 Neb. at 174-75,403 N.W.2d at 370-71.
Thus, under § 77-1511 an appeal to a district court concerning a decision by a county board of equalization is a trial de novo, but only the tax liability questions raised before the board of equalization are the questions for adjudication by the district court in its appellate jurisdiction. Gordman Properties Co. v. Board of Equal., supra; Brown v. Douglas County, 98 Neb. 299, 152 N.W. 545 (1915); State Bank v. *21Seward County, 95 Neb. 665, 146 N.W. 1046 (1914); Reimers v. Merrick County, 82 Neb. 639, 118 N.W. 113 (1908).
From the record, it is as undeniable as it is eminently clear that the question whether the Law Center is tax-exempt governmental property was never presented to the county board of equalization and, therefore, was never part of the decision from which the Bar Foundation appealed to the district court.
Whether a question is raised by the parties concerning jurisdiction of the lower court or tribunal, it is not only within the power but the duty of an appellate court to determine whether such appellate court has jurisdiction over the subject matter. . . . Where lack of subject matter jurisdiction in the original tribunal is apparent on the face of the record, yet the parties fail to raise that issue, it is the duty of the reviewing court to raise and determine the issue of jurisdiction sua sponte.
Glup v. City of Omaha, 222 Neb. 355, 359, 383 N.W.2d 773, 777 (1986).
When a trial court lacks the power, that is, jurisdiction, to adjudicate the merits of a claim, the Supreme Court also lacks power to adjudicate the merits of the claim. Andrews v. City of Lincoln, 224 Neb. 748, 401 N.W.2d 467 (1987).
“Litigants cannot confer subject matter jurisdiction on a judicial tribunal by either acquiescence or consent.” Coffelt v. City of Omaha, 223 Neb. 108, 110, 388 N.W.2d 467, 469 (1986). Accord, In re Interest of Adams, 230 Neb. 109, 430 N.W.2d 295 (1988); Andrews v. City of Lincoln, supra; In re Interest of L.D. et al., 224 Neb. 249, 398 N.W.2d 91 (1986).
Although the district court had subject matter jurisdiction regarding the Bar Foundation’s appeal from the county board’s decision, the jurisdiction of the district court, as an appellate court, was restricted to questions raised before and decided by the county board. Gordman Properties Co. v. Board of Equal., 225 Neb. 169, 403 N.W.2d 366 (1987). While the district court had subject matter jurisdiction to adjudicate questions regarding charitable and educational exemptions under § 77-202(1)(c), since those questions were raised before the county board, the district court lacked subject matter *22jurisdiction to adjudicate any question concerning the exemption of governmental property pursuant to § 77-202(1)(a), because the question whether the Law Center is governmental property was never raised before the county board. In view of the fact that the district court lacked power to adjudicate the question whether the Law Center is tax-exempt governmental property, we vacate the district court’s judgment that the Law Center was not governmental property exempt from taxation pursuant to § 77-202(l)(a).
As a result of the district court’s lack of power to determine whether the Law Center was tax-exempt governmental property, this court also lacks jurisdiction to decide whether the Law Center is exempt from taxation in accordance with § 77-202(l)(a).
TAX EXEMPTION FOR 1985 TO 1987
Although Neb. Rev. Stat. § 77-202.03 (Cum. Supp. 1984) does provide a 4-year period of exemption from property taxation, “[sjection 77-202.03 . .. in substance [provides] that, if property is exempted from taxation in any given year, such exemption may continue for each of the 3 successive years after grant of such exemption if the property owner annually and timely files the specified affidavit.” Indian Hills Comm. Ch. v. County Bd. of Equal., 226 Neb. 510, 517-18, 412 N.W.2d 459, 464 (1987). Since the Law Center is not exempt from property taxation for the year 1984, we do not reach the question whether the center is tax-exempt for the years 1985 to 1987, inclusive.
CONCLUSION
We affirm the district court’s judgment that the Bar Foundation’s Law Center is not tax-exempt property under § 77-202(l)(c), but we vacate the district court’s judgment concerning tax exemption for the Law Center under § 77-202(l)(a).
Affirmed in part, and in part vacated.