Court Opinion

ID: 9951807
Source: CourtListenerOpinion
Date Created: 2024-03-19 12:07:08.979079+00
Date Added: 2024-06-11T14:42:49.595482
License: Public Domain

IN THE COURT OF APPEALS OF NORTH CAROLINA

                                   No. COA23-728

                                Filed 19 March 2024

Property Tax Commission, No. 22 PTC 40

IN THE MATTER OF THE APPEAL OF:

OAK MEADOWS COMMUNITY ASSOCIATION, Appellant

From the decision of the Randolph County Board of Equalization and Review
concerning the exemption of certain real property.

      Appeal by taxpayer-appellant from final decision entered 28 February 2023 by

the North Carolina Property Tax Commission sitting as the State Board of

Equalization and Review. Heard in the Court of Appeals 23 January 2024.

      Robinson, Bradshaw & Hinson, P.A., by Emily J. Schultz, H. Hunter Bruton,
      Emma W. Perry, Curtis C. Strubinger, and Timothy P. Misner, for taxpayer-
      appellant.

      Poyner Spruill LLP, by Emily M. Meeker and N. Cosmo Zinkow, for appellee
      Randolph County.

      ZACHARY, Judge.

      This appeal raises a single issue of law: the definition of the phrase “providing

housing” as used in the property tax exemption provided for “[r]eal and personal

property owned by . . . [a] nonprofit organization providing housing for individuals or

families with low or moderate incomes[.]” N.C. Gen. Stat. § 105-278.6(a)(8) (2023)

(emphasis added). Oak Meadows Community Association (“Oak Meadows”) applied

for this exemption, which the Randolph County Board of Equalization and Review
                          IN RE: OAK MEADOWS CMTY. ASS’N

                                      Opinion of the Court

(“Randolph County”) denied. Oak Meadows now appeals from the final decision of the

North Carolina Property Tax Commission (“the Commission”), which affirmed

Randolph County’s denial of Oak Meadows’s request. After careful review, we affirm.

                                 I.        Background

      Oak Meadows is a North Carolina nonprofit organization, and its purpose is

“to own and maintain land as a manufactured home community with the goal of a

permanently affordable, safe, and stable environment in which its current and future

members shall live as residents[.]” Oak Meadows owns approximately 3.74 acres of

land (“the Property”) in Asheboro, North Carolina. The Property has the

infrastructure   to   operate   as     a    manufactured     home   community   (“MHC”)

accommodating 60 manufactured homes.

      Oak Meadows is structured as a leased-land housing cooperative, in which its

members are residents on the Property. Oak Meadows’s members own their

manufactured homes individually, and Oak Meadows has no ownership interest in

any of the homes. No individual obtains a financial return on investment through

membership in Oak Meadows.

      On 9 February 2022, Oak Meadows requested a property tax exemption

pursuant to § 105-278.6(a)(8) for the Property. On 16 February 2022, Randolph

County denied Oak Meadows’s request, concluding that “housing is not being

provided for individuals or families with low or moderate incomes.” Oak Meadows

timely appealed to the Commission, before which the matter came on for hearing on

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                        IN RE: OAK MEADOWS CMTY. ASS’N

                                Opinion of the Court

9 November 2022.

      On 28 February 2023, the Commission issued its final decision, affirming the

denial of Oak Meadows’s request. The Commission found as fact:

               2. There appears to be no dispute that the
                  manufactured homes situated in the MHC on the
                  [Property] are individually owned, and that [Oak
                  Meadows] has no ownership interest in the
                  manufactured homes. Accordingly, we find that
                  [Oak Meadows] owns only the underlying land
                  within the MHC and does not own any of the homes
                  themselves.

               3. Although [Oak Meadows] owns the MHC land, we
                  note that land alone is insufficient to house an
                  individual or family. [Oak Meadows] facilitates
                  manufactured home lot rentals for its members, but
                  since individual homeowners must secure their own
                  manufactured housing separately from leasing lots
                  within the MHC, we find that [Oak Meadows] does
                  not “provid[e] housing for individuals or families.”

      Based on these findings of fact, the Commission concluded:

               2. The plain language of N.C. Gen. Stat. §105-278.6
                  provides that a property owner must be engaged in
                  “providing housing for individuals or families with
                  low or moderate incomes” in order to receive the
                  benefit offered by the statute. [Oak Meadows] does
                  not provide housing by solely owning the rental lots
                  in a MHC, and the individual homeowners are
                  responsible for securing their own homes to place
                  upon the rental lots. Accordingly, [Oak Meadows]
                  does not qualify for the benefit offered by N.C. Gen.
                  Stat. §105-278.6.

               3. Although [Oak Meadows] contends that granting the
                  requested exemption is consistent with the policy of
                  the State in promoting the creation of housing for

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                         IN RE: OAK MEADOWS CMTY. ASS’N

                                  Opinion of the Court

                   low and moderate income households, we find there
                   to be no ambiguity in the language of the statute
                   that would allow for the requested exemption under
                   the facts of this case, and note further that the
                   Commission has no authority to override the stated
                   intent of the General Assembly.

      Consequently, the Commission affirmed Randolph County’s denial of Oak

Meadows’s request. Oak Meadows timely filed notice of appeal.

                                II.   Discussion

      Oak Meadows argues that the Commission erred as a matter of law by denying

its request for a property tax exemption because the Commission’s “atextual

interpretation cannot be squared with [N.C. Gen. Stat. § 105-278.6(a)(8)]’s plain

meaning, or [its] statutory structure and purpose.” We disagree.

A. Standard of Review

      On appeal from a decision of the Commission, this Court “shall decide all

relevant questions of law, interpret constitutional and statutory provisions, and

determine the meaning and applicability of the terms of any Commission action.”

N.C. Gen. Stat. § 105-345.2(b). This Court

            may affirm or reverse the decision of the Commission,
            declare the decision null and void, or remand the case for
            further proceedings; or it may reverse or modify the
            decision if the substantial rights of the appellants have
            been prejudiced because the Commission’s findings,
            inferences, conclusions, or decisions are any of the
            following:

                   (1) In violation of constitutional provisions.

                   (2) In excess of statutory authority or jurisdiction of

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                           IN RE: OAK MEADOWS CMTY. ASS’N

                                    Opinion of the Court

                        the Commission.

                     (3) Made upon unlawful proceedings.

                     (4) Affected by other errors of law.

                     (5) Unsupported by competent, material, and
                         substantial evidence in view of the entire record
                         as submitted.

                     (6) Arbitrary or capricious.

Id. “In making these determinations, the court shall review the whole record or the

portions of it that are cited by any party, and due account shall be taken of the rule

of prejudicial error.” Id. § 105-345.2(c).

       “The taxpayer bears the burden of proving that its property meets the

requirements of an ad valorem taxation exemption.” In re Blue Ridge Hous. of

Bakersville LLC, 226 N.C. App. 42, 49, 738 S.E.2d 802, 807 (2013) (cleaned up), disc.

review improvidently allowed, 367 N.C. 199, 753 S.E.2d 152 (2014). “Issues of

statutory construction are questions of law, reviewed de novo on appeal.” Id. (cleaned

up). When conducting de novo review, the appellate court “considers the matter anew

and freely substitutes its own judgment for that of the Commission.” Id. (citation

omitted).

B. Analysis

       “In appeals to the Commission, the taxpayer bears the burden of proving that

its property is entitled to an exemption under the law.” In re Eagle’s Nest Found., 194

N.C. App. 770, 773, 671 S.E.2d 366, 368 (2009). “This burden is substantial and often

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                          IN RE: OAK MEADOWS CMTY. ASS’N

                                   Opinion of the Court

difficult to meet because all property is subject to taxation unless exempted by a

statute of statewide origin.” Id. (citation omitted). “[W]here a statute provides for an

exemption from taxation, the statute is construed strictly against the taxpayer and

in favor of the State. The underlying premise when interpreting taxing statutes is:

Taxation is the rule; exemption the exception.” Broadwell Realty Corp. v. Coble, 291

N.C. 608, 611, 231 S.E.2d 656, 658 (1977) (cleaned up).

      When interpreting tax statutes, as with any other statute, it is a “well-

recognized rule that the words used in a statute must be given their natural or

ordinary meaning.” In re N.C. Forestry Found., Inc., 296 N.C. 330, 337, 250 S.E.2d

236, 241 (1979). “Where the statutory language is clear and unambiguous, the Court

does not engage in judicial construction but must apply the statute to give effect to

the plain and definite meaning of the language.” In re POP Capitol Towers, LP, 282

N.C. App. 491, 497, 872 S.E.2d 338, 342 (2022) (citation omitted).

      Here, the parties agree that this case may be resolved upon review of the plain

language of N.C. Gen. Stat. § 105-278.6(a)(8), although they disagree as to the effect

of that language. The term “provide housing” as used in § 105-278.6(a)(8) “has not

been defined by statute or judicial decision; therefore, we look to its natural, approved

and recognized meaning.” In re R.W. Moore Equip. Co., 115 N.C. App. 129, 132, 443

S.E.2d 734, 736, disc. review denied, 337 N.C. 693, 448 S.E.2d 533 (1994). When

interpreting undefined words or phrases, “courts may look to dictionaries to

determine the ordinary meaning of words within a statute.” Parkdale Am., LLC v.

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                          IN RE: OAK MEADOWS CMTY. ASS’N

                                   Opinion of the Court

Hinton, 200 N.C. App. 275, 279, 684 S.E.2d 458, 461 (2009).

      In its appellate brief, Oak Meadows provides a dictionary definition of the word

“provide” as meaning to “supply” or “make available.” Oak Meadows thus contends

that it “is ‘providing housing’ by supplying real property and making it available to

use for housing.” Oak Meadows further explains that it “provides individuals and

families with a place to live—namely legal home sites in a safe and affordable

community” and that “a home site, like the manufactured home itself, is an essential

element of manufactured housing.”

      Be that as it may, providing “an essential element of manufactured housing”

is not the same as “providing housing.” It strains credulity to suggest that the natural

or ordinary meaning of the phrase “providing housing” would be “providing [the real

property for] housing[.]” N.C. Gen. Stat. § 105-278.6(a)(8).

      Notably, Oak Meadows offers a dictionary definition of “provide” in its

appellate brief, but fails to include a dictionary definition of “housing.” “Housing” is

defined as: “Structures built as dwellings for people, such as houses, apartments, and

condominiums.” Housing, Black’s Law Dictionary (11th ed. 2019). This definition is

consistent with the natural or ordinary meaning of “housing” and also contradicts

Oak Meadows’s argument that it “is ‘providing housing’ by supplying real property

and making it available to use for housing.” As the Commission aptly noted, “land

alone is insufficient to house an individual or family.” Thus, the Commission did not

err in rejecting Oak Meadows’s argument.

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                          IN RE: OAK MEADOWS CMTY. ASS’N

                                  Opinion of the Court

      Because the “statutory language is clear and unambiguous,” we are without

authority to “engage in judicial construction but must apply the statute to give effect

to the plain and definite meaning of the language.” POP Capitol Towers, 282 N.C.

App. at 497, 872 S.E.2d at 342 (citation omitted). We therefore affirm the

Commission’s final decision, which affirmed Randolph County’s denial of Oak

Meadows’s request for a property tax exemption pursuant to N.C. Gen. Stat. § 105-

278.6(a)(8).

                               III.   Conclusion

      For the foregoing reasons, the Commission’s final decision is affirmed.

      AFFIRMED.

      Judges COLLINS and WOOD concur.

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