STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

AEROSPACE WORKERS, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 75-1142

)

DEPARTMENT OF REVENUE, ) DIVISION OF AD VALOREM TAXES, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, this matter came up for hearing in Room 104 of the Collins Building, Tallahassee, Florida, at 10:30 A.M., on September 4, 1975, before Diane D. Tremor, Hearing Officer with the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Harry Lewis Michaels, Esquire

MICHAELS & PATTERSON

2007 Apalachee Parkway

Tallahassee, Florida 32301

For Respondent: Harold F.X. Purnell, Esquire

Assistant Attorney General Department of Legal Affairs The Capitol

Tallahassee, Florida 32304 INTRODUCTION

The issue presented for decision at the hearing was whether petitioner, Aerospace Workers, Inc., is entitled to a charitable exemption for ad valorem taxation pursuant to F.S. Sections 196.012(1), 196.012(3) and 196.192(2). More specifically, the issue is whether, pursuant to F.S. Section 193.122(1), the change made by the Brevard County Board of Tax Adjustment (BTA) of the Brevard County Tax Assessor's denial of exempt status is legally sufficient or whether the evidence presented to the BTA was sufficient to overcome the assessor's presumption of correctness. The respondent, Division of Ad Valorem Taxes, determined that the BTA's basic findings and the evidence and testimony upon which they were based were insufficient to support the ultimate finding that petitioner qualifies for a fifty percent exemption or to overcome the Tax Assessor's presumption of correctness. The Petitioner contends that more than fifth percent of its facilities be used for charitable purposes and that the decision of the BTA should be upheld. It is further contended that the Tax Assessor's assessment is not entitled to a presumption of correctness inasmuch as said assessment was based on invalid reasoning.

In accordance with F.S. Section 193.122(1), and the case of Hollywood Jaycees v. State, Department of Revenue, 306 So. 2d 109 Fla. 1975), the hearing in this cause was limited the scope of the record established before the Brevard County BTA and was thus more in the nature of a review of the proceedings before the BTA rather than a de novo hearing.

FINDINGS OF FACT

Having heard oral argument on the issues and considered the evidence presented in this cause, it is found as follows:

1. Petitioner, Aerospace Workers, Inc., is a non-profit Florida corporation, which owns record title to the Union Lodge 166, located at 171 Taylor Avenue in Cape Canaveral, Florida.

   
   

2. For the 1974 tax year, the Brevard County Property appraiser or Tax Assessor assessed the petitioner's lodge at full market value without allowance of any exemption. The reason given by the assessor for the disapproval of exempt status was that there is no provision under the Florida Statutes for the exemption of labor organizations.

   
   

3. The petitioner, through its financial secretary, William J. Boydstun, then appealed the Tax Assessor's denial exempt status to the Brevard County Board of Tax Adjustment, claiming that the building should be tax exempt as one used for charitable purposes.

   
   

4. Mr. Boydstun informed the BTA that the building in question "at any time we are not using it, has been thrown open to the public." The BTA was further informed that the building

   
   

   "has been used by the Brevard County Beach Erosion Control District by the Narc Aid Society, by the Avon and Winslow Beach Residents Assn.,

   by the Roosevelt Garden Condominium Apartments, Inc. We have let local weddings take place. It has been used by the concerned Democrats and also by the County Commissioners in a couple of instances. Tomorrow we are letting the County use our building as a polling place."

   
   

   Mr. Boydstun also stated that petitioner's members donated $225,000.00 to the United Fund in Brevard County and had helped support the Brevard Junior Deputies, the Brevard Mental Health Center and various other organizations in the County.

   
   

5. Also submitted to the BTA by Mr. Boydstun was a list of persons or groups who had used the building since December of 1973. Included in this list were the Mark Age Society (which petitioner stated during the hearing is a religious group), the Brevard County Beach Erosion Control District, the Avon by the Sea and Winslow Beach Residents' Association, the Roosevelt Garden Condominium Apartments, Inc., Concerned Democrats, political meetings for Senator Lawton Chiles, Mallory Horne and Governor Reubin Askew, and a minister for a local wedding. It was also stated that the building has been used as a polling place and for meetings for the United Fund Drive.

   
   

6. The Tax Assessor represented to the BTA that he denied the exemption because labor unions are not given exemptions according to the Florida Law, and

   that the Department of Revenue denied an exemption for petitioner for that reason the previous year.

   
   

7. At the meeting of the BTA on October 4, 1974, Chairman Hurdle moved that petitioner be granted a 50 percent charitable exemption on the basis that the property is used for charitable purposes. The motion carried by a vote of 2 to 1. The Tax Assessor did not concur.

   
   

8. In its notice to the Executive Director of the Department of Revenue, the BTA explained its reasons for granting the Petitioner a fifty percent charitable exemption by stating that:

   
   

   "the Board found that the property should receive a 50 percent tax exemption because they felt that the use of the property provided a service which was of such a community service that its discontinuance could result in the allocation

   of public funds for the continuance of said services. The Board basically found that the use of the building by the general public met the requirements in the description of charitable purposes found in Chapter 196.012(6) of the Florida Statutes and therefore granted a 50 percent charitable tax exemption for the property described in Petition No. 11."

   
   

9. In its "Notice of Proposed Agency Action to Invalidate Relief Granted by Board of Tax Adjustment," the Department of Revenue concluded in its "Staff Recommendation" that the BTA's findings and the evidence and testimony upon which they were based, were insufficient to support the ultimate finding that petitioner qualifies for a fifty percent exemption, and that the BTA had not come up with sufficient evidence to overcome the Property Appraiser's presumption of correctness. It was further concluded in said "Staff Recommendation" that there was no showing that the use of the property by the various community organizations was a use of more than 51 percent, and that the BTA's granting of a 50 percent exemption is expressly contrary to F.S. Section 196.012(3).

SUMMARY OF ORAL ARGUMENTS

The above factual findings constitute the record to which oral argument was limited at the hearing.

It was the petitioner's position at the hearing that inasmuch as the Tax Assessor gave an invalid reason for denying the charitable exemption, there is no presumption of correctness attaching to his assessment. It was further contended that, given the reason for denial by the assessor (i.e., that labor organizations could not be exempt), petitioner did not believe it acceded to make a showing of predominant charitable usage. In the alternative, petitioner asserts that there was sufficient evidence before the BTA to permit the BTA to conclude that the property was used predominantly for charitable purposes.

It was the respondent's position at the hearing that, regardless of the reason given by the assessor for his denial of exempt status, petitioner failed in its burden to prove the assessment wrong. In other words, it is the assessment itself which carries the presumption of correctness, and not the reasoning behind the assessment. Respondent contended that the record of the

proceedings before the BTA is devoid of any evidence entitling petitioner to a charitable exemption.

CONCLUSIONS OF LAW

Aside from applying the tax statutes and case law to the facts involved herein, the essential difficulty with this case lies in the fact that the reason for denial given by the assessor, both in the notice of disapproval of petitioner's application for exemption and before the Tax Adjustment Board, was erroneous. The fact that the reason given by the assessor was erroneous was conceded by the respondent at the hearing. It is the use which is put to the property, and not the character of ownership of the property, which determines entitlement to a charitable exemption. State v. Doss, 8 So. 2d 15 (Fla. 1942), and Haines v. St. Petersburg Methodist Homes, Inc. 173 So. 2d 176 (Fla. App.

2nd, 1966). The undersigned hearing officer can certainly appreciate the problem of and burden upon the taxpayer who appeals a decision of the assessor to the BTA expecting only to overcome the grounds as stated by the assessor for his denial. This may well affect the quality and quantify of the evidence presented to the BTA by the taxpayer. Nevertheless, two propositions of law appear to be well settled in Florida in the area of taxation. First, exceptions from taxation are strictly construed against the taxpayer and are not to be granted unless the taxpayer clearly demonstrates that the property is within the exemption provided. Dr. William Howard Hay Foundation v. Wilcox 24 So. 2d 237 (Fla. 1945); State ex rel. Szabo Food Services, Inc. of N.C. v. Dickenson, 286 So. 2d 529 (Fla. 1973); and Straughn v. Camp, 293 So. 2d 689 (Fla. 1974).

Second, assessments when made by the proper official are deemed to be prima facie correct. In order to be overcome, the assessment must be affirmatively assailed by appropriate and sufficient allegations and proofs, excluding every reasonable hypothesis of a legal assessment. Folsom v. Bank of Greenwood, 120 So. 317 (Fla. 1929); Harbond, Inc. v. Anderson, 134 So. 2d 816 (Fla. App. 2nd, 1961); Powell v. Kelly, 223 So. 2d 129 (Fla. App. 3rd 1973). That is, an assessor may reach a correct result for the wrong reason. City National Bank of Miami v. Blake, 257 So. 2d 264 (Fla. App. 3rd 1972). It would thus appear that it is, as contended by the respondent, the assessment itself which is presumptively correct, and not the reason given for the assessment. This, of course, does not mean that any assessment will be upheld. It simply means that the taxpayer carries the heavy burden of overcoming the validity of the assessment, for whatever reason it may have been made.

This then brings us to the real issue in this cause: did the petitioner affirmatively present sufficient proof to the BTA to justify overturning the assessment? Stated differently, did the petitioner sufficiently overcome the assessment by affirmatively demonstrating that its property is used for a predominantly charitable purpose? The undersigned hearing officer, while appreciating the petitioner's dilemma at the hearing before the BTA, thinks not.

It should first be pointed out that I do not believe that the designation of the BTA of a 50 percent exemption, in lieu of a 50.001 percent designation, is fatal to petitioner's position in this case. While F.S. Section 196.012(3) defines "predominant use of property" as a use "in excess of fifty percent" and the BTA consistently referred to a fifty percent exemption, it is felt that this was a mere inadvertent expression and the Board intended to grant petitioner a charitable use exemption in excess of fifty percent. Just as a faulty reason could not destroy the validity of a proper assessment, as discussed above, so a misnomer, or even a mistaken belief, as to the amount constituting predominant usage should not defeat a change by the BTA which is otherwise supported by substantial, competent evidence.

However, it is my conclusion that the evidence presented by the petitioner was no sufficient to overcome the assessor's presumption of correctness.

Florida Statutes Section 196.012(6) defines a "charitable purpose," for purposes of exemption from ad valorem taxation, as

" . . . a function or service which is of such a community service that the discontinuance could result in the allocation of public funds for

the continuance of the function or service."

Among the groups listed by petitioner who used the building for the year in question, it is highly doubtful that discontinuance of such use would result in the allocation of public funds for such as the Mark Age Society (a religious group), residents' associations, apart corporations, political meetings, and certainly not for local weddings. In fact, the use of the building by only one group listed, the Brevard County Beach Erosion Control District, appears to qualify as a use for which public funds could be allocated for the continuation of the service. And, from the list provided by Mr. Boydstun, it appears that this group only used the facility in question one time. While the testimony adduced before the Board did not indicate that the building was also used for meetings for the United Fund Drive, as a polling place and by the County Commissioners, there was no evidence as to the extent of such usages. The record also discloses that petitioner's members contributed a large amount of donations to the United Fund and helped support the Brevard Junior Deputies and Mental Health Center. However, such contributions while certainly commendable, would be irrelevant to the status of petitioner's property. It is the actual use to which the property is put which provides the ad valorem tax status of the property. State v. Doss, supra; Haines v. St. Petersburg Methodist Homes, Inc., supra. The mere fact that an organization, or its members, contributes to a charity does not authorize the exemption of its property from taxation. Johnson

v. Sparkman, 31 So. 2d 863 (Fla. 1947). An exemption is granted only to the extent that the property is used for a predominantly charitable purpose.

In conclusion, it is found that there was not sufficient evidence before the Brevard County Board of Tax Adjustment to justify the change and to grant a charitable exemption to the property in question. The petitioner failed to demonstrate, with any preciseness, the actual extent of use upon which entitlement to the exemption must be based.

RECOMMENDATION

Based upon the findings of fact and conclusions of law, it is my recommendation that the action taken by the Brevard County Board of Tax Adjustment be invalidated and that the denial of exempt status made by the Brevard County Tax Assessor be affirmed.

DONE and ORDERED this 4th day of October, 1975, in Tallahassee, Florida.

DIANE D. TREMOR, Hearing Officer Division of Administrative Hearings Collins Building, Room 104 Tallahassee, Florida 32399-1550

(904) 488-9675

Docket for Case No: 75-001142

Orders for Case No: 75-001142