Opinion
13-P-1050
11-10-2014
COMMUNITY INVOLVED IN SUSTAINING AGRICULTURE, INC. v. BOARD OF ASSESSORS OF DEERFIELD.
NOTICE: Decisions issued by the Appeals Court pursuant to its rule 1:28 are primarily addressed to the parties and, therefore, may not fully address the facts of the case or the panel's decisional rationale. Moreover, rule 1:28 decisions are not circulated to the entire court and, therefore, represent only the views of the panel that decided the case. A summary decision pursuant to rule 1:28, issued after February 25, 2008, may be cited for its persuasive value but, because of the limitations noted above, not as binding precedent.
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
Community Involved in Sustaining Agriculture, Inc. (CISA) appeals the decision of a single member of the Appellate Tax Board (board) that CISA is not exempt from property taxes pursuant to G. L. c. 59, § 5, Third (the statute). The board concluded that CISA is not a charitable organization as defined in the statute because its dominant purpose is to benefit farmers, and "any benefit derived by the public [is] incidental." On appeal, CISA argues that the board erred in construing the statute too narrowly. We agree and reverse.
CISA is a Massachusetts not-for-profit corporation organized under G. L. c. 180. CISA also has tax exempt status from the Internal Revenue Service pursuant to 26 U.S.C. § 501(c)(3) (2006).
"Exemption statutes are strictly construed," and the party seeking an exemption bears the burden of proving its entitlement. New England Forestry Foundation, Inc. v. Board of Assessors of Hawley, 468 Mass. 138, 148 (2014). We will not reverse the decision of the board "if it is based on substantial evidence and on a concrete application of the law." Koch v. Commissioner of Rev., 416 Mass. 540, 555 (1993). Although the board's factual findings are supported by substantial evidence, the board erred in its legal conclusion that CISA is not a charitable organization within the meaning of the statute and thus not entitled to a charitable property tax exemption.
CISA owns real property at 1 Sugarloaf Street in South Deerfield, and occupies seventy percent of the property. CISA concedes that it is not entitled to an exemption from property taxes for the thirty percent of the property that it leases to tenants.
The statute affords an exemption from property taxes where "property is held by a 'charitable organization' and 'occupied by [the organization] . . . for the purposes for which it is organized.'" New England Forestry Foundation, Inc., supra, quoting from G. L. c. 59, § 5, Third. An organization is "charitable if the dominant purpose of its work is for the public good and the work done for its members is but the means adopted for this purpose." Massachusetts Med. Soc. v. Assessors of Boston, 340 Mass. 327, 332 (1960). When considering whether an organization's dominant purpose is charitable, the court considers "a number of nondeterminative factors." New Habitat, Inc. v. Tax Collector of Cambridge, 451 Mass. 729, 732 (2008). "The farther an organization's dominant purposes and methods are from traditionally charitable purposes and methods, the more significant [the New Habitat, Inc.] factors will be." Id. at 733.
These factors include whether the organization (1) "provides low-cost or free services to those unable to pay"; (2) "charges fees for its services"; (3) "offers its services to a large or 'fluid' group of beneficiaries"; (4) "provides its services to those from all segments of society and from all walks of life"; or (5) "limits its services to those who fulfill certain qualifications." New Habitat, Inc., 451 Mass. at 732-733.
Unlike the board, we conclude that CISA more closely resembles a traditionally charitable organization than it does a commercial enterprise. On the facts before it, the board erred in concluding that the primary beneficiaries of CISA's services are its members, and any public benefit is incidental. Rather, the facts establish that CISA's programs benefit an indefinite number of people, many of whom are not members, and any benefit to farmers "is but the means adopted for this purpose." Id. at 732. See Jackson v. Phillips, 14 Allen 539, 556 (1867). Indeed, CISA distributes a free annual "locally grown farm products guide" to nearly 50,000 households, and helps vulnerable populations such as the elderly, low income citizens, school children, and urban residents receive fresh local food that they would otherwise struggle to access. By increasing food security and developing sustainable local farming, CISA engages in charitable activities that benefit the general public. Moreover, CISA is traditionally charitable because its programs lessen the burdens of many government agencies "interested in food systems, nutrition, public health, agriculture, and local farmers." See Assessors of W. Springfield v. Eastern States Exposition, 326 Mass. 167, 170 (1950) ("Whatever aids agriculture helps to advance the health and prosperity of the Commonwealth").
The board's reliance on Boston Chamber of Commerce v. Assessors of Boston, 315 Mass. 712 (1944), is misplaced. The Chamber of Commerce is funded by its members, who, in turn, directly benefit from the Chamber of Commerce's programs. Id. at 715. CISA, by contrast, is not funded by the farmers that it supports, but primarily by government contracts, grants, and charitable donations.
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Even were we to view CISA's dominant purposes and methods as falling farther on the scale from traditionally charitable purposes and methods, the New Habitat, Inc. factors weigh heavily in favor of granting the property tax exemption. First, as the board acknowledged, CISA provides free and low-cost services to vulnerable populations. See New Habitat, Inc., 451 Mass. at 732. For example, in 2010 alone, CISA's Senior FarmShare program provided nearly 350 elderly citizens with fresh food from local farms for ten weeks. CISA also works to facilitate the growth of farmers' markets in low income areas, "the use of SNAP (Food Stamps) benefits at farmers markets," and "the ability of Springfield area day cares to obtain locally grown food."
Further evidencing its charitable purpose, CISA does not restrict membership to those meeting certain criteria. Cf. Massachusetts Med. Soc., supra at 329 (restricting membership to people at least twenty-one years old with medical degrees and medical licenses). Indeed, CISA's members are diverse and come from different segments of society, including "private citizens, community advocates, retailers, institutions, restaurants, farmers, [and] landscape and garden centers." Although members pay a fee (ranging from $35 to $500), CISA's by-laws allow the board of directors to waive the fee in certain instances. Nor is there any suggestion that CISA's membership fees are unreasonable. To the contrary, CISA's membership fees comprise less than six percent of CISA's annual revenue and help advance CISA's charitable purpose by defraying operational costs. See New Habitat, Inc., 451 Mass. at 735 (exempting organization despite "substantial fees" where fees were spent on operational costs).
In sum, CISA is a charitable organization and accordingly, is entitled to an exemption from property taxes under the statute.
Decision of the Appellate Tax Board reversed.
By the Court (Grasso, Kantrowitz & Meade, JJ.), Clerk Entered: November 10, 2014.