Court Opinion

ID: 9552382
Source: CourtListenerOpinion
Date Created: 2023-08-07 19:09:49.20961+00
Date Added: 2024-06-11T15:26:16.002947
License: Public Domain

ELLETT, Chief Justice:
This is a suit brought by the County Assessor of Salt Lake County, Utah, to determine the taxable status of a building and lot owned by the Loyal Order of Moose. The matter was submitted to the trial court pursuant to a stipulation that included the pleadings filed with the court and the deposition of the Secretary and Club Manager of the Loyal Order of Moose.
The trial court, relying on the decision of this Court in the case of Benevolent and Protective Order of Elks v. Tax Commission 1, ruled that the property was not subject to tax because it was used exclusively for charitable or religious purposes. The Elks case differs from the instant one in several important particulars. In the first place, the evidence there showed that *1024one entire floor was used exclusively for charitable purposes. In the second place, practically ten percent of the total expenses was for charitable purposes.2 In any event, each case should be decided on its particular set of facts. The general rule that an exemption from taxation is to be strictly construed governs in the application of tax-exemption provisions to clubhouses and organizations such as fraternal and benevolent societies. In 39 A.L.R.3d 640 et seq., at page 647 of the annotation, the following statement is found:
Cutting across the varying phraseology of the nonexpress-type exemption provisions involved in the cases collected herein is the view that a lodge building of a fraternal order is not exempt if the dominant uses of the building are for the social enjoyment of the members, since such a building in its legal aspect is no different from the clubhouse of an ordinary social club. And in a number of cases property of fraternal or benevolent societies was held to be without the provisions of a nonexpress-type exemption statute, since at least a portion of such property was utilized to produce an income, as by being leased for commercial purposes. [Emphasis added.]
Additionally, future cases may well be affected by policy considerations arising out of the current tax pinch on states and municipalities, which, it may be implied, has prompted many jurisdictions to alter the application of tax-emption statutes by construing them more stringently in favor of the taxing authority.
Section 2, Article XIII of the Utah Constitution provides that “. . . lots with the buildings thereon used exclusively for either religious worship or charitable purposes, . . . shall be exempt from taxation.” This section is codified by our statute3 which states that such property shall be exempt from taxation. The question involved in this case is whether the property is used exclusively for religious worship or charitable purposes. There is no claim made to the effect that the property is used exclusively for religious purposes. '
The foregoing section of the Constitution also provides that “all tangible property in the state, not exempt under the laws of the United States or under this Constitution, shall be taxed . . . ” If an owner claims that his property is exempt from taxation, the burden is upon him to show that it falls within the stated exception.4
In the instant matter, the deposition of the Secretary and Club Manager showed that the members use the building principally as a place to lounge, drink liquor, and play cards. It is used as a restaurant, open to the general public, from 11:30 a. m. to 3:00 p. m. Monday through Friday of each week and at prices comparable with other restaurants in the city. Dances and entertainment are held on Friday and Saturday evenings where only members and their guests are permitted to attend. During the week the building is open to members for social activities such as bingo and sewing as well as for usual lodge functions. The rooms are also rented out for weddings when sponsored by a member.
The lodge does sponsor charitable parties for children, about six or seven each year; and each year, it sends $4.00 from the members’ annual dues back to the national headquarters in Illinois, which money is used partially, at least, in maintaining a home for needy children. The costs for the chil*1025dren’s parties for 1975 were listed as follows:
Lagoon $ 142.00
Halloween 328.75
Christmas 394.74
Easter 439.65
2 ten-speed bikes given away at lagoon party 158.00
Total Expenses: $1,463.14
Other expenses for the Moose Lodge Special Community Projects for the same year were:
Bi-Centennial Flag Raising $ 52.13
Restoration supplies and flag at Memory Grove 302.31
Sub for Santa (4 families) 791.39
Christmas boxes for the hospitalized 36.70
Little League 150.00
Candy trays for children at Medical Center 45.00
Idaho disaster donation 300.00
Total Expenses: $1,677.53
The total amount of money spent on charitable objects during 1975 was $6,558.75, out of a total expenditure of approximately $309,000; and this charitable outlay was greater than that of any prior year. It amounted to slightly more than two percent of the total expenditure.
The receipts for the year 1975 were $170,-621.18 from the lodge and $178,733.60 from the club or, a total of $349,354.78. It thus appears that there is more club activity than lodge activity, and club activity consists chiefly of drinking, dancing, card playing, and other social functions. In connection with the club activities carried on in the building, the record shows the following amounts were spent on “bar supplies,” (liquor and mixes):
Year of 1973 $17,525.77
Year of 1974 27,740.41
Year of 1975 31,281.16
In addition, the club spent the following amounts for liquor licenses for the three years: $620, $801, and $574. It also spent $90 per year as premium on the liquor license bond.
When the activities conducted in the building are examined, it appears that the property partakes more of the nature of a social club than it does of a place used solely for religious or charitable purposes. It does not come within the constitutional exemption from taxation.
The judgment of the trial court is reversed and the case remanded with directions to order the property to be taxed along with other nonexempt property in the county. No costs are awarded.
WILKINS, J., concurs in the result.
HALL, J., having disqualified himself does not participate herein.

. Utah, 536 P.2d 1214 (1975).

. The author of this opinion did not agree with the ruling in the Elks case.

. 59-2-1, U.C.A., 1953 as amended.

. Parker et al. v. Quinn, 23 Utah 332, 64 P. 961 (1901).