Court Opinion

ID: 9735968
Source: CourtListenerOpinion
Date Created: 2023-08-26 18:38:03.333519+00
Date Added: 2024-06-11T18:27:03.128755
License: Public Domain

MR. JUSTICE DAVIS, dissenting: I cannot agree with the opinion of the majority of the court in this case. To continue the tax-exempt status of property owned by religious corporations even though the use of that property is no longer that to which the property was originally dedicated, and for which it was granted its tax-exempt status, can be justified only if the statutory language granting such exemption clearly encompasses the new use of the property. In the case at bar, it does not. The majority has extended tax-exempt status to property owned, but not used by a religious corporation. This is not justified by the controlling constitutional and statutory provisions. The problem is largely one of statutory construction. Section 3 of article IX of the constitution of 1870 provides that property used for school, religious, cemetery and charitable purposes may be exempted from taxation, but only by general law. Section 19.2 of the Revenue Act of 1939 (Ill.Rev.Stat. 1969, ch. 120, par. 500.2) exempts from taxation “All property used exclusively for religious purposes, or used exclusively for school and religious purposes, or for orphanages and not leased or otherwise used with a view to profit ***” (emphasis added). It is the latter clause which defines the issue in this case, and which demands a more precise interpretation than that given to it by the majority. Tax exemption statutes must be strictly construed and all doubts resolved against an exemption. People ex rel. Marsters v. Rev. Saletyni Missionaries, Inc. (1951), 409 Ill. 370, 375; People ex rel. Lloyd v. University of Illinois (1934), 357 Ill. 369, 376. The majority opinion recognizes that doubt exists as to whether the property owned by the Sisters is entitled to an exemption by conceding that the contentions of the litigants, both for and against exemption, are sustained by prior decisions of this court. The words of section 19.2 — “with a view to profit” —have been interpreted by this court as modifying the words “leased” and “used”, so that property of a religious corporation used exclusively for religious purposes is exempt from taxation under the statute unless such property is leased by such corporation or otherwise used with a view to profit. People ex rel. Hesterman v. North Central College (1929), 336 Ill. 263. The cases cited by the plaintiff Center —People ex rel. Goodman v. University of Illinois Foundation (1944), 388 Ill. 363, and People ex rel. Hesterman v. North Central College, (1929), 336 Ill. 263 — can be distinquished factually. Both the University of Illinois and North Central College continued to conduct their schools, for valid and tax-exempt educational purposes, while the leases involved where in effect. Here, however, the Sisters had terminated the religious use of their building prior to, and during the life of the lease to the Center, and its nonreligious use of the property did not entitle the Sisters to a tax-exempt status, as did the continued educational use in the case of the university and college. The majority observes this factor, yet fails to draw therefrom the necessary conclusion which it imparts. Since the lease does not serve the tax-exempt purpose of the institution, that purpose having terminated, the lease, necessarily, is one for profit. Under the pertinent constitutional, and statutory provisions, there is a material difference between the actual and exclusive use of property for a religious purpose and the application to the same purpose of the income derived from tenants who occupy the property, and this court has held that it is immaterial whether the owner actually makes a profit or sustains a loss by virtue of the letting. Turnverein “Lincoln” v. Board of Appeals (1934), 358 Ill. 135, 144. Under this view, it is evident that the property lost its tax-exempt status when the exclusive religious use of the property ceased and the Sisters leased it for a profit, since they realized a substantial income therefrom and, additionally, would not be required to pay taxes, or meet other maintenance expenses in connection therewith. The majority notes that it is the primary use of the land which determines the tax-exempt status of the property. I agree with this proposition, but the majority has added to it a new and unwarranted dimension, i.e., that the primary use is that to which the property is put after leasing. Clearly, this is a secondary use. The lease itself establishes the use by the Center as secondary. The primary use of the property by the Sisters was religious; under the lease the property ceased to be used for this purpose and it was rented to the Center for profit. Under such use, the Sisters no longer should enjoy a tax-exempt status. The majority’s decision, in effect, has exempted from taxation funds earned by a religious corporation from property let for the production of income. This violates the provisions of section 19.2 of the Revenue Act of 1939. I would deny the tax exemption.