rejecting the Court of Appeals test for assessing the taxability of religious publications “based on whether the particular book or activity adhered to the ‘doctrine and practice’ or ‘religious faith’ of the respective denominations” in favor of a test that did not turn upon an assessment of religious doctrine
How later courts described this case
- rejecting the Court of Appeals test for assessing the taxability of religious publications “based on whether the particular book or activity adhered to the ‘doctrine and practice’ or ‘religious faith’ of the respective denominations” in favor of a test that did not turn upon an assessment of religious doctrine
- dollar volume of exempt activity as compared with the entire volume of business done
Written by the judges who cited it.
The opinion
*531 OPINION ON PETITION TO REHEAR
DYER, Chief Justice.
Two petitions to rehear have been filed. One, filed on behalf of Book Agents and the Methodist Board of Publication, is “solely for clarification of some of the language used . . . .” The Baptist Sunday Board asks somewhat broader review and reconsideration.
Both petitions ask for additional guidance on the interrelation of the taxation formula stated by the chancellor and approved by this Court and the categories of exempt and nonexempt property stated by this Court. Additionally, the Baptist petitioner raises questions about the application of the allocation formula to its property, the categorization of certain materials it publishes, the constitutionality of the line drawn between exempt and non-exempt property, and the procedure on remand.
First, this Court approved the chancellor’s formula which said:
It is the opinion of this Court that a portion of the activities of the Methodist Publishing House are purely and exclusively religious. The property of the Methodist Publishing House shall be exempt only to the extent of the value of the portion used exclusively for the religious purposes of said institution, and the remaining or other portion shall be subject to taxation.
That portion of the property or that prorated use of a property used for printing and publishing of non-religious materials shall be subject to taxation. Administrative activities not direjctly related to a religious purpose shall likewise be subject to taxation. There shall be an apportionment of value so as to allow exemption to so much of the value as the religious portion represents. The tax will be to the extent of the volume of non-religious, secular work compared to the entire volume of business done.
The opinion of this Court did, however, modify the chancellor’s formula to the extent that it refined the categories of religious and non-religious (exempt and nonexempt) activities. Thus, on remand, property shall be categorized in accordance with this Court’s opinion and the tax shall be levied in accordance with the formula set out above.
Next, the Baptist petitioner has called the Court’s attention to certain differences between its distribution system and that of the Methodist petitioners. The petitioner argues that its distribution center is not a headquarters for general interest bookstores and that, therefore, the property so used should not be declared totally non-exempt, but should be subject to the allocation formula above. To the extent that the Baptist petitioner can show these areas to be distribution centers for exempt materials, the areas should be allocated as nontaxable.
The Baptist petitioner has also asked that the Court expressly note that its earlier opinion did not make a finding that the petitioner publishes secular material, but rather made a statement of law that publication of secular materials is not an exempt activity. No particular publications have been designated secular by the State Board or the trial court, and such designation, if applicable to any publication, must await the remand of the cause.
The Baptist petitioner has raised questions about the applicability of certain terminology in this Court’s opinion to the Baptist Sunday School Board’s activities, as well as about the constitutionality of the approach used. First, the petitioner argues that the Southern Baptist Convention has no “parent governing body” nor do other denominations with congregational forms of government. Likewise, it argues that limiting exemptions to “denominational” bodies with “parent governing bodies” which authorize “specific denominational programs” would be unconstitutional. Tax *532 exemption is not denied non-denominational or interdenominational religious bodies by this opinion. When such bodies are before this Court, determinations will be made of their property tax questions. The existence of a “parent governing body” is not a condition precedent to exemption. Religious institutions using property for purposes integral to the work of the institution retain tax exempt status and institutional authorization for a program indicates that a particular use is for an exempt purpose. Likewise, institutional distribution rather than distribution to the general public or a subject matter directly related to the institutions’ work would be guides to the tax exempt status of particular publications. In essence, this Court was not making a specific authorizing resolution by a denominational governing body a requirement for tax exempt use of property, but rather saying that an activity must be directly related to the religious program or work of the institution to be exempt. Thus, property used for institutional advisory programs or literature integral to an organizational activity would be exempt, but the relationship to the institutional work must be direct.
This Court is mindful that this is a tax exemption for religious institutions and certain types of governmental review of their activities could endanger concepts underlying the separation of church and state. Therefore, in respect to procedure, the good faith allocations made by the religious institutions should be accepted as the basis for assessment, but upon evidence that the allocations have been made in bad faith, the assessor may, of course, seek review of the allocation.
Finally, the Court directs the chancellor’s attention to T.C.A. § 67-1220 in directing further proceedings in this cause on remand.
McCANLESS, J., and W. M. LEECH, Special Justice, concur.
CHATTIN and FONES, JJ., dissenting.