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Keywords

statuteappealappellant
jurisdictionstatuteleasecorporationnonprofitnovationappellant

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Defenders of Christian Faith v. Board of County Com’rs of Sedgwick County, 219 Kan. 181, 547 P.2d 706

Facts

The appellant, The Defenders of the Christian Faith, Inc., purchased a ten-story building in Wichita, previously the Radisson Wichita Hotel, and renovated it for various uses. The top eight floors served as a residence for senior citizens, the mezzanine housed administrative offices and a chapel, while the first floor contained commercial shops including a restaurant and pharmacy. The landowner sought a tax exemption for the entire building, claiming that most of it was used for religious and charitable purposes, but the first floor's commercial use led to the denial of the exemption.

The appellant, The Defenders of the Christian Faith, Inc., is a nonprofit corporation organized for religious purposes, although not affiliated with any church. In September, 1971, it purchased the ten-story building at First and Market Streets in Wichita which had formerly housed the Radisson Wichita Hotel. After some renovation Defenders had, by January 1, 1972, devoted the building to the following purposes: Top eight floors: A residence for ambulatory ‘senior citizens,’ who paid $85.00 to $400.00 per month rent. Mezzanine: Administrative offices of Defenders; a chapel, a ‘fellowship room’ and auditorium for residents of the building. First floor: Lobby and shops. Four shops were leased in 1972 as a restaurant, a pharmacy, a beauty parlor, and a gift shop, grossing $10,600.00 in rentals per year. Two more shops were to be rented when remodeling was complete.

Issue

Whether the owner of a multistoried building, part of which is used for commercial purposes, is entitled to a partial exemption from ad valorem taxes for the portion used exclusively for religious or charitable purposes.

The determinative issue is whether the owner of a multistoried building, part of which is concededly used for commercial purposes, is entitled to a partial exemption from ad valorem taxes for that part of the building which is arguably used exclusively for religious or charitable purposes.

Rule

In the absence of a statute to the contrary, where a single building is under single ownership and listed for taxation as an entity, the nonexempt use of any portion of the building renders the entire building taxable.

In the absence of a statute to the contrary, where a single building is under single ownership so that it is listed for taxation as an entity, the nonexempt use of any portion of the building renders the entire building taxable.

Analysis

The court applied the rule by determining that the first floor's use for commercial purposes disqualified the entire building from tax exemption. The court emphasized that the tax exemption depends solely on the exclusive use of the property, not on the ownership or character of the owner. Since part of the building was used for nonexempt purposes, the court concluded that the entire building was subject to taxation.

Defenders necessarily relies on cases from other jurisdictions, and particularly the annotation in 159 A.L.R. 685 which states: ‘By the great weight of authority, a statute which in effect exempts from taxation property or buildings used for certain purposes authorizes a partial exemption of a building in case the building is used in part for exempt purposes and in part for nonexempt purposes.’

Conclusion

The court affirmed the decisions of the board of tax appeals and the district court, concluding that the entire building was taxable due to the nonexempt use of the first floor.

We therefore hold that in the absence of a statute to the contrary, where a single building is under single ownership so that it is listed for taxation as an entity, the nonexempt use of any portion of the building renders the entire building taxable.

Who won?

The board of tax appeals and the district court prevailed, as they correctly found that the nonexempt use of the first floor rendered the entire building taxable.

The board thus declined to make specific findings as to whether any portion of the building was devoted exclusively to an exempt use. The fact that a portion of the building was devoted to a clearly nonexempt use precluded a finding that the ‘property’ was being ‘actually and regularly used exclusively for . . . religious . . . or charitable purposes.’

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