Opinion
No. 86-756
Decided April 15, 1987.
Taxation — Exemption for real property taxes — Furnishing of low-cost housing by nonprofit charitable corporation is not exclusive use for charitable purposes, when — R.C. 5709.12.
APPEAL from the Board of Tax Appeals.
Appellant, Cogswell Hall, Inc., is a nonprofit corporation organized and operated exclusively for charitable purposes. The stated purposes of appellant are, inter alia:
"(a) To establish, maintain and conduct a residence where room and board will be furnished to women, regardless of age and according to their need [and]
"(b) To provide opportunities for leisure time activities to said residents thereby aiding their spiritual, mental and social welfare * * *."
The pertinent facts, as set forth in the decision of the Board of Tax Appeals, which the appellant itself quotes in its own factual statement, are as follows:
"Cogswell Hall operates a home for women of modest means who find themselves in need of good nutrition, love, companionship and entertainment. Approximately 25 women presently live in the home. The residents pay monthly rent for their rooms in the amounts ranging from $205 to $313. These rental amounts paid cover less than half of the costs of their maintenance; the other half is met by gifts, bequests and income from endowments. Cogswell Hall will house and nurture women of any age; however, the average age of the residents is about 78 years. Appellant generally serves as a step between living in one's own apartment and living in a nursing home."
Appellant's application for exemption from taxation of the real property, which serves as the above-described home for women, was denied by the Commissioner of Tax Equalization. Upon appeal, the Board of Tax Appeals affirmed the denial of the tax exemption.
The cause is now before this court upon an appeal as of right.
John Howland, for appellant.
Anthony J. Celebrezze, Jr., attorney general, and James C. Sauer, for appellee.
The issue before us is whether the property in question "is used exclusively for charitable purposes" pursuant to R.C. 5709.12, so as to be exempt from taxation.
We note that appellant does not raise any claim for exemption of such property under R.C. 5709.12 as a "* * * home for the aged, as defined in section 5701.13 of the Revised Code * * *." R.C. 5701.13 sets forth detailed criteria necessary to qualify for tax-exempt status as a "home for the aged," which include the availability of medical, nursing and additional services for full care. The absence of such services here is the obvious reason that no claim for exemption under R.C. 5709.12 is urged by appellant.
The case controlling here is Philada Home Fund v. Bd. of Tax Appeals (1966), 5 Ohio St.2d 135, 34 O.O. 2d 262, 214 N.E.2d 431, the syllabus of which is as follows:
"Real property owned by a nonprofit charitable corporation the stated purpose of which is to secure and operate resident apartments for aged and needy persons is not exempt from taxation under Section 5709.12, Revised Code, even though it is shown that the rent intended to be charged is at or below cost, and in no event to result in a profit, and that it is expected that some persons unable to pay the full rental will be assisted by subventions from corporate funds."
The facts herein preclude the applicability of this statutory exemption. Nevertheless appellant would have us overrule Philada. To do so would be to abandon the long-standing exclusive-use rule. That rule, succinctly reiterated in National Church Residences v. Lindley (1985), 18 Ohio St.3d 53, 18 OBR 87, 479 N.E.2d 870, which approved Philada, at 55, 18 OBR at 89, 479 N.E.2d at 873, "* * * is that the furnishing of low-cost housing at or below market prices, where residents pay a part or all of their rental costs, is not, in and of itself, an exclusive use of the property for charitable purposes." We decline to abandon such rule, which arose from our function of judicial interpretation, and any change thereof is, of course, the prerogative of the General Assembly. At the same time we endorse the Board of Tax Appeals' statement that, "* * * [we admire] the appellant's intent and dedication, and we commend its benevolence and kindness toward women in need. * * *"
Accordingly, we hold that R.C. 5709.12 was neither unreasonably nor unlawfully construed by the board in the instant case and we therefore affirm its decision.
Decision affirmed.
MOYER, C.J., SWEENEY, HOLMES, DOUGLAS and H. BROWN, JJ., concur.
LOCHER and WRIGHT, JJ., concur in judgment only.
I recognize that the instant case does not involve any claim for exemption of the property in question under R.C. 5709.12 as a "* * * home for the aged, as defined in section 5701.13 of the Revised Code * * *." However, I also recognize that the average age of the residents at Cogswell Hall is between seventy-eight and eighty years.
Thus, I concur separately for the reasons expressed in my concurrence in part and dissent in part in Ohio Presbyterian Homes v. Kinney (1984), 9 Ohio St.3d 90, 96, 9 OBR 319, 324, 459 N.E.2d 500, 505. I once again strongly urge the legislature to weigh the results of today's decision against the contributions of this state's senior citizens and remedy the technicalities that negate the debt we owe to them.
WRIGHT, J., concurs in the foregoing opinion.