York Rite Bodies of Freemasonry of Savannah v. Board of Equalization

Birdsong, Judge,

dissenting.

I am compelled to dissent as to Division 2 of the majority opinion and accordingly, I would reverse the holding of the trial court as to the issue of whether it erred in its interpretation of the “purely public charity” doctrine.

In my view, the position taken by the majority is too broad and threatens to destroy the property tax exemption status of many charitable organizations in this state, including perhaps that of the Red Cross and Salvation Army who maintain and operate non-profit headquarters or administrative buildings necessary for the perpetuation of their charitable entities and the planning of their organizational goals, including the accomplishment and coordination therein of public relations and publicity activities and the preparation of diverse charitable campaign strategies not directly connected to the disbursement of existing charitable funds.

Currently, OCGA § 48-5-41 (a) (4) provides that among the property exempt from ad valorem property taxation is that of “[a]ll institutions of purely public charity.” OCGA § 48-5-41 (a) (5) (A) and (B) provides: “All property of nonprofit hospitals used in connection with their operation when the hospitals have no stockholders, have no income or profit which is distributed to or for the benefit of any private person, and are subject to the laws of this state regulating nonprofit or charitable corporations . . . (B) Property exempted pursuant to this paragraph shall not include property of a nonprofit hospital held primarily for investment purposes or used for purposes unrelated to . . . (i) Providing of patient care . . . (ii) Providing and delivery of health care services; or . . . (iii) Training and education of physicians, nurses and other health care personnel.”

The Masonic lodges in the instant case may be referred to as the brain of the creature. It is undisputed no income is derived from the lodges. The function of the lodge is for the meeting place of its members and for the decisions which the members make. All decisions regarding how the lodge supports its charities emanates from its head*151quarters; without the brains, its lodges, the creature is nothing. Surely this use qualifies the lodges for their exemption which they ask for and deserve. This Code section on its face applies to all institutions, both public and private, which are institutions of “purely public charity.” In Massenburg v. Grand Lodge, 81 Ga. 212, 217 (7 SE 636), the Supreme Court did “concede the purely public character of the charity which the Grand Lodge of Georgia administers. . . .’’It has never been held that masonic bodies do not support a wide variety of charitable institutions and activities ministering to the needs of the whole of classes for whose relief the charities are intended or adapted, including as commonly known to the public at large: children’s hospitals, burn centers, eye foundations and orphanages. For a definition of “charity” as used in tax exemption statutes, see generally Peachtree on Peachtree Inn v. Camp, 120 Ga. App. 403, 409-410 (170 SE2d 709).

However, the majority in essence observes that in Tharpe v. Central Ga. Council, B. S. A., 185 Ga. 810, 813 (196 SE 762), it was recently held that a test to determine whether property shall be exempt from taxation “is whether the property itself is ‘dedicated to charity and used exclusively’ as an institution of purely public charity.” Moreover, in Mu Beta Chapter &c. Corp. v. Davison, 192 Ga 124, 126 (14 SE2d 744), the Supreme Court held that “[i]t is the use to which the property is put, rather than the declaration of purpose found in its owner’s charter, that determines the question of exemption from taxation.” Compare Atlanta Masonic Temple Co. v. City of Atlanta, 162 Ga. 244 (133 SE 864).

However, while mere latent ownership of property by an institution of public charity will not entitle it to tax exemption per se (Thomas v. Northeast Ga. Council, B. S. A., 241 Ga. 291, 293 (244 SE2d 842)), neither should the mere ownership and operation by a charitable institution of an organizational headquarters deprive such property per se of its tax exemption, regardless of the nomenclature given to such administrative building and whether they be called headquarters, administrative wings, operations buildings, lodges, or meeting halls. In fact, the Supreme Court has held that “[i]n so far as such organizations are administrators and disbursers of purely public charity, their property permanently in use for that purpose is exempt from taxation.” (Emphasis supplied.) Richardson v. Executive Comm. &c. Convention, 176 Ga. 705, 708 (169 SE 18).

In Elder v. Henrietta Egleston Hosp., 205 Ga. 489 (53 SE2d 751), the City of Atlanta assessed that property of the corporation, including lands, buildings, and hospital equipment which the hospital used exclusively for the purpose of operating and maintaining its institutions. Id. at 490. The court noted that the precedent found in a number of earlier cases was no longer binding, in view of the new wording *152adopted in the Constitution of 1945 concerning the tax exemption of property of purely public charity institutions. The 1945 constitutional provision provided, inter alia, that the General Assembly may exempt from taxation “ ‘all institutions of purely public charity;. . . provided the property so exempted be not used for the purpose of private or corporate profit and income, distributable to shareholders in corporations owning such property or to other owners of such property, and any income from such property is used exclusively for religious, educational and charitable purposes, or for either one or more of such purposes and for the purpose of maintaining and operating such institution.” (Emphasis supplied.) Id. at 492. The Court stated that in 1946, the General Assembly had passed an act exempting from taxation all of the property enumerated in the above-stated clause using the identical language there employed. Id. at 492. Then the Court observed “[b]ut in the present case no contention is made, nor could the same be successfully made, that the General Assembly has not exempted from taxation all of the property which it had constitutional authority to exempt. . . .” (Emphasis supplied.) Id. at 492. Thereafter, the Court concluded “the property sought to be taxed has been exempted by statute,” and in doing so first opined that “as shown by our statement of facts, all of its income from all sources is used exclusively for maintenance, operation, enlarging its charitable facilities, and for furtherance of its charitable purposes, with no part of the same distributable to any one having an interest therein.” (Emphasis supplied.) Id. at 492-493. OCGA § 48-5-41 (c) today contains virtually the same verbiage as the above provisions cited in Elder. And in determining the use to which the property is placed using the test of Tharpe and Mu Beta, supra, due consideration must also be given to the statutory provisions of OCGA § 48-5-41 (c), and the holding of our Supreme Court in Elder. Viewing Elder and OCGA § 48-5-41 (c) in their entirety and in light of prior cases recognizing the need for charitable institutions to maintain and operate their organizations, it appears that a permissible use of tax exempt charitable property clearly would include such uses as for the purposes of administering, maintaining and operating their own charitable institutions, and that unless the property was used to generate an income or profit not exempted from taxation under OCGA § 48-5-41 (c), the property itself would remain tax exempt.

A Masonic “lodge” serves as the cornerstone of the organization. Within the “lodge” is conducted the business of the lodge, including the voting for dispensing of charitable funds, the coordination of current charitable activities, and the planning of future charitable fund raising events. Even in Massenburg, under the then existing more stringent state rules of charitable property exemption, the Supreme Court recognized “the temple or lodge-building of the charitable or*153der or society — [as being] the domicile, habitation, seat, and external symbol of the organization. . . .” Massenburg, supra at 216. Moreover, in Division 2 of its opinion in Massenburg, the court tacitly reaches the conclusion that the portion of the lodge property not being operated as a money making rental activity “could rightfully claim” tax exemption through application of the “rule of apportionment.” (Emphasis supplied.) Massenburg, supra at 220 (2). In the case sub judice, the board of tax assessors does not assert in its brief that the “lodge” buildings were ever used or rented in the commercial sense or that any profit has ever been made or attempted through the use of this property. Compare OCGA § 48-5-41 (c). Today, under OCGA § 48-5-41 (c) and Elder, even the making of income or profit by the charitable institutions property would not per se destroy its tax exemption. Rather, the use to which such profit or income is put and the manner in which it ultimately is distributed would appear to be controlling under the plain language of OCGA § 48-5-41 (c).

Decided November 27, 1990 Rehearing denied December 20, 1990 J. Walter Cowart, Gordon B. Smith, for appellants. Brennan, Harris & Rominger, Richard J. Harris, M. Carol Branham, for appellee.

Accordingly, I would reverse the trial court’s judgment and remand the case for an application of the rule for tax exemption of the property of charitable institutions, above discussed, in a manner consistent with the legislative intent clearly reflected by OCGA § 48-5-41 (c) and the holding of the Supreme Court in Elder, supra.

I respectfully dissent. I am authorized to state that Judge Shulman and Judge Smith join in this dissent.