The opinion
TODD, Judge,
dissenting.
I respectfully dissent from the majority opinion which, in effect, overruled City of Nashville v. State Board of Equalization, 210 Tenn. 587 , 360 S.W.2d 458 (1962).
In the cited case, it was held that the realty of an eleemosynary institution is exempt under the statute only when it is both occupied and used exclusively by the institution for one of its charter purposes, and exemption is denied when property is leased to others or not used for charter purposes.
In the same case it was held that secular business enterprises outside the purposes stated in the charter with no relationship to charter purposes except consequential benefits are not exempt from taxation.
In said case it was held that portions of the property used for cafeteria, snack bar and free employee parking lots, including the roof of a building otherwise exempt, were taxable under the rationale that the said uses, even though confined to employees, were secular in nature and in competition with private, tax paying enterprise.
It is argued that there is little or no tax paying private enterprise in competition with the parking lots in the present case. It is not stated in the Nashville v. State Board case that there were actually private parking lots with sufficient capacity to accommodate the 665 automobiles parked on the property claimed exempt. (In reason and common sense, it must be assumed that no such large parking area was lying unused because of the parking space claimed exempt.)
The reasonable import of the Nashville v. State Board case is that the test is the deprivation of the opportunity of patronage to tax paying enterprises which would naturally exist in the absence of tax exempt competition. If the meaning of Nashville v. State Board is as conceived by the Chancellor, then Nashville v. State Board is now subject to revision based upon the fact that the free parking lots furnished to employees have now driven private parking lots out of business so that there are no longer any private tax-paying parking lots to be affected by the competition.
In reality, appellee is paying its employees a fringe benefit (free parking fees) which, if paid in cash would be taxable as income and, when used to pay a private parking lot, would again augment tax revenues when the owner of the parking lot paid his privilege and property taxes. Our exemption law simply does not authorize tax exempt institutions to furnish tax exempt services to their employees.
As stated in the Nashville v. State Board opinion:
“It may well be that the Board, like many other large business concerns, finds that its furnishing eating and parking facilities for employees makes them better satisfied and furthers its efficiency. The same would no doubt be true as to furnishing them many other ‘fringe benefits’ of modern-day living; and if the Board may operate the parking lot and restaurant businesses tax-free, why may it not also operate other businesses tax-free, such as housing project, clothing store, automobile repair shop, etc., for its employees?”
The writer of this opinion is not unfriendly to eleemosynary institutions, nor unsympathetic with the need for parking facilities for employees. The burden of this dissent is that there must be some limitation upon the extent of exempt property holdings, and that limitation was stated in the Nashville v. State Board decision.
There is no reason why appellee cannot continue to provide parking facilities to its employees at a nominal charge sufficient to defray taxes and other expenses of its employee parking lot.
For the reasons stated, the decree of the Chancellor should be reversed.