Here, the Petitioner’s representative first contends that the Petitioner’s property qualified for an educational exemption in 2008. However, Mr. Towe presented no meeting agendas and no training materials. He merely offered the conclusory testimony of Mr. Arnold that the subject property was not rented out to the union members or to the general public. Id. While Mr. Arnold testified that the union hall was used for Joint Council 69 safety trainings and that training was provided for “different companies whether it be defensive driving classes, or forklift training or whatever the training may be,” he admitted that such “training” only occurs approximately two hours a week and, in fact, the majority of the property’s use is related to “union business.” This falls far short of the evidence necessary to show that the facility was used more than 50% of the time for educational purposes. Thus, Mr. Arnold’s testimony fails to sufficiently prove that the Petitioner’s property is entitled to an exemption for any educational use.
Similarly, the Petitioner’s representative failed to support his claim that the Petitioner’s property qualified for an exemption based on any charitable use. A charitable purpose will generally be found to exist if: (1) there is evidence of relief of human want manifested by obviously charitable acts different from the everyday purposes and activities of man in general; and (2) there is an expectation that a benefit will inure to the general public sufficient to justify the loss of tax revenue. College Corner, L.P. v. Department of Local Government Finance, 840 N.E.2d 905, 908 (Ind. Tax Ct. 2006). However, beyond arguing that the building was predominantly used for charitable purposes in his opening statement, Mr. Towe failed to provide any documentation or present any testimony to meet the requirements of Indiana Code § 6-1.1-10-16. Thus, the Petitioner failed to prove that its property was predominantly used for charitable purposes.
The Petitioner’s representative concentrated most of his case on Indiana Code § 6-1.1-10-23(a). That statute provides that “tangible property is exempt from property taxation if it is owned by a fraternal beneficiary association which is incorporated, organized, or licensed under the laws of this state.” Ind. Code § 6-1.1-10-23(a). The exemption, however, “does not apply to real property unless it is actually occupied and exclusively used by the association in carrying out the purpose for which it was incorporated, organized, or licensed.” Ind. Code § 6-1.1-10-23(b). Similarly, Indiana Code § 27-11-7-4 states “Every society organized or licensed under this article is declared to be a charitable and benevolent institution, and all of its funds shall be exempt from all and every state, county, district, municipal, and school tax other than taxes on real estate not occupied by a society in carrying on its business.” Ind. Code § 27-11-7-4.
While Indiana Code § 6-1.1-10-23 does not define the term “fraternal beneficiary association,” at least one case has defined the term in interpreting the predecessor statute to Indiana Code § 6-1.1-10-23. See State Board of Tax Commissioners v. Fort Wayne Sports Club, Inc., 258 N.E.2d 874, 880 (Ind. Ct. App. 1970). In Fort Wayne Sports Club, the court explained that the term “fraternal beneficiary association” has a “very limited and definitive meaning.” 258 N.E.2d at 880. The court applied the meaning set forth in Indiana Statutes Annotated § 39-4401(b), which was part of a larger statute governing the regulation of fraternal beneficiary associations under Indiana’s insurance laws. See Id. Indiana Statutes Annotated § 39-4401(b) provided, in relevant part:
The term ‘fraternal benefit society’ or ‘fraternal beneficiary association’ shall mean any corporation, society, order or voluntary association, without capital stock, organized and carried on solely for the mutual benefit of its members and their beneficiaries, and not for profit and having a lodge system and representative form of government, and which shall make provision for the payment of [death] benefits in accordance with this act.
Fort Wayne Sports Club, 258 N.E.2d at 880 (quoting Ind. Stat. Anno. § 39-4401(b)).
In many ways, the definition of “fraternal beneficiary association” set forth in Indiana Statutes Annotated § 39-4401(b) mirrors the language currently found in its successor statute, Indiana Code § 27-11-1-1, which provides “This article applies to any incorporated society, order, or supreme lodge without capital stock, whether incorporated or not, conducted solely for the benefit of its members and their beneficiaries and not-for-profit, operated on a lodge system with ritualistic form of work, having a representative form of government, and that provides benefits in accordance with this article.” Although Indiana Code § 27-11 now refers to those organizations as “fraternal benefit societies,” the legislative intent behind Indiana Code § 6-1.1-10-23 appears to have been to provide an exemption to fraternal organizations covered by the Indiana insurance laws. That remains true despite the slight difference in terminology between Indiana Code § 27-11 and its predecessor statutes. In fact, the Tax Court applied the provisions of Indiana Code § 27-11 to a request for exemption under Indiana Code § 6-1.1-10-23 in United Ancient Order of Druids-Grove # 29 v. Wayne County Prop. Tax Assessment Bd. of Appeals, 867 N.E.2d 296, 2007 Ind. Tax LEXIS 34 (Ind. Tax Ct., May 17, 2007). While this decision is unpublished, it is a persuasive argument and provides guidance to the Board in its determination in this matter.
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Here, the Petitioner’s witness testified that the union’s officers are elected by its members in a secret ballot election and that these elections are held every three years. However, “Indiana Code § 27-11-2-2(2) is not ambiguous: it clearly states that a fraternal beneficiary association has a representative form of government when either the supreme governing body or the board of directors elects its officers.” United Ancient Order of Druids-Grove # 29 v. Wayne County Prop. Tax Assessment Bd. of Appeals, 867 N.E.2d 296, 2007 Ind. Tax LEXIS 34 (Ind. Tax Ct., May 17, 2007) (“Grove # 29 has conceded that its local members elect its officers; therefore, it has not shown that it has a representative form of government as defined by Indiana Code § 27-11-2-2(2).”) Thus, under Indiana Code § 27-11-2-2(2) either the supreme governing body or the board of directors must elect its officers. But like the property owner in United Ancient Order of Druids, the Petitioner’s members elect Local #103’s officers. Moreover, the Petitioner provided no evidence that it was “operated on a lodge system with ritualistic form of work.” Ind. Code § 27-11-1-1.
Further, the Local #103 bears the burden of showing that it made provisions for the payment of benefits in accordance with Indiana Code § 27-11. Thus, the Petitioner was required to demonstrate that it acted as an insurer regulated by the Indiana Department of Insurance. The Petitioner easily could have done so by presenting a copy of a certificate of authority authorizing it to transact business under Indiana Code § 27-11. Such a certificate would have constituted prima facie evidence of the existence of the Petitioner as a fraternal beneficiary association as of the date of that certificate. See Ind. Code § 27-11-4-6 (“Upon presentation of satisfactory evidence that the society has complied with all the provisions of the law, the commissioner shall issue to the society a certificate of authority authorizing the society to transact business under this article. The certificate of authority is prima facie evidence of the existence of the society at the date of the certificate.”). But the Petitioner failed to do so. In fact, Mr. Arnold admitted that the Petitioner did not have any such certificate. Mr. Arnold merely testified that the Petitioner negotiates benefits for its members through collective bargaining agreements. Thus, the Petitioner failed to meet its burden of proving that it is a fraternal beneficiary association within the meaning of Indiana Code § 6-1.1-10-23 or Indiana Code § 27-11-7-4.3
The Petitioner’s representative also argued that the property has been found to be tax exempt “since 2000.” Towe argument. However, in original tax appeals, each assessment and each tax year stands alone. See Thousand Trails Inc. v. State Bd. of Tax Comm’rs, 747 N.E.2d 1072, 1077 (Ind. Tax Ct. 2001). Thus, evidence that the Petitioner’s property was exempt in the past does not raise a prima facie case that the property is exempt in a different tax year. Id.
Similarly, the Petitioner’s representative argues that a long history of cases granting or ordering property tax exemptions for union property precludes the Board from denying an exemption to Local #103’s property at issue in this appeal.
First, Mr. Towe requested that the Board take judicial notice of several injunctions issued by the Marion County Superior Court in the 1970’s.4 But “In an effort to channel tax disputes to a specialized tribunal, the Indiana Legislature created the Tax Court in 1986.” In Marion County Auditor v. Revival Temple of Apostolic Church, 898 N.E.2d 437 (Ind. Ct. App. 2008), the Indiana Court of Appeals stated: “The General Assembly created the Indiana Tax Court for the purpose of consolidating tax-related litigation in one court of expertise. The two general prerequisites to the Tax Court acquiring exclusive subject matter jurisdiction over a case are that the case must arise under the tax laws of Indiana and that there is a final determination made by a relevant agency.”5 898 N.E.2d at 445. Because the Indiana Tax Court has exclusive jurisdiction over any case that arises under the tax laws of Indiana, it is not clear how decisions from a court with no jurisdiction over property tax matters could be binding on the Respondent, the Allen County PTABOA or the Indiana Board of Tax Review.
Furthermore, in the majority of the cases cited by the Petitioner’s representative, the court either entered default judgment against the defendants or the defendants agreed to the injunction by stipulation. While collateral estoppel “bars the subsequent litigation of a fact or issue which was necessarily adjudicated in a former lawsuit if the same fact or issue is presented in the subsequent lawsuit,” the “former adjudication will only be conclusive as to those issues which are actually litigated and determined therein.” Bartle v. Health Quest Realty VII, 768 N.E.2d 912, 917 (Ind. Ct. App. 2002) (emphasis added). Thus, the Petitioner failed to establish how cases issued by the Marion County Superior Court that were the result of a default judgment or a stipulated entry could be or should be binding on the Indiana Board of Tax Review almost forty years later.
Similarly, Mr. Towe requested that the Board follow the decisions in In re the Notice of Action on Review of Application for Exemption for Teamsters Local 135, State Board of Tax Commissioners, No. 73-132-894 (August 6, 1974); In re the Notice of Action on Review of Application for Exemption for the Office Committee Union, State Board of Tax Commissioners, No. 89-032-8 (August 6, 1990) and Union Building Corporation v. Wayne County Property Tax Assessment Board of Appeals, Indiana Board of Tax Review, Petition No. 89-011-02-2-8-00016 (February 4, 2005). The decisions in In re the Notice of Action on Review of Application for Exemption for Teamsters Local 135 and In re the Notice of Action on Review of Application for Exemption for the Office Committee Union were issued by the State Board of Tax Commissioners – an agency that was abolished by the legislature in 2001. See 2001 Ind. Acts 198 § 119(b)(2).
And while the final determination in Union Building Corporation v. Wayne County Property Tax Assessment Board of Appeals was issued by the Indiana Board of Tax Review, that decision specifically found that “retirees, widows of union members, and the ladies auxiliary use it for educational purposes, such as aerobic classes and computer orientation classes… The Red Cross has monthly meetings there and the Girl Scouts have weekly meetings there. The Red Cross and the Girl Scouts are allowed to use the building at no cost.” Indiana Board of Tax Review, Petition No. 89-011-02-2-8-00016 (February 4, 2005). Thus, the Board found that the petitioner in that case made a prima facie showing that its property was predominantly used for educational and charitable purposes. Here, the Petitioner made no such showing.
To the extent that the Petitioner argues the prior cases issued by the State Board of Tax Commissioners or the Indiana Board of Tax Review can be read as finding property is exempt simply because it is used for union purposes, the Indiana Tax Court has since clarified that is not the case. In 6787 Steel Workers Hall, Inc. v. John R. Scott, Assessor of Porter County, 933 N.E.2d 591 (Ind. Tax Ct. 2010), the Tax Court upheld the Board’s determination that a banquet hall owned and operated by a union was not exempt. According to the Tax Court, “First, as the Indiana Board recognized, Local 6787 provided no citation to Indiana statutes, case law, or any other persuasive authority for the proposition that unions are inherently charitable… [and] while Local 6787’s by-laws evidence some charitable/educational intent as to the organization, intent does not establish predominant use.” 933 N.E.2d at 596. The Tax Court found that “because the use of the property for union activities was not a per se exemption qualifier under Indiana Code § 6-1.1-10-16, Local 6787 needed to provide additional support in order to demonstrate that those activities were indeed educational/charitable in nature.” Id., fn. 10.
Thus, even if the decisions of the State Board of Tax Commissioners or Union Building Corporation could be read to support the Petitioner’s contention that union property is exempt when it is used for union purposes, the Tax Court’s decision in 6787 Steel Workers Hall held to the contrary and is now binding. 933 N.E.2d 591. See State Board of Tax Commissioners v. Fraternal Order of Eagles, Lodge No. 255, 521 N.E. 2d 678, 679 (Ind. 1988), citing Baker v. Compton, 211 N.E.2d 162 (Ind. 1965) (An administrative interpretation “would not be binding if it were incorrect.”).
And, in fact, the Petitioner’s interpretation of the Union Building Corporation decision is contrary to decisions the Board has issued on union property since 2005. See Local 692 Operative Plasterers and Cement Masons International Association v. Porter County Property Tax Assessment Board of Appeals, Indiana Board of Tax Review, Petition No. 64-026-06-2-8-00001 (June 11, 2007) (“Here, the Petitioner failed to submit any evidence supporting the claim for exemption. The Petitioner did not identify any statute that exempts the property of labor union representatives from taxation. Nor are we aware of any such statute. Further, the Petitioner failed to show that its property is “owned, occupied, and used” for “educational, literary, scientific, religious or charitable purposes.”); International Union of Operating Engineers, Local 150 Building Corporation, Indiana Board of Tax Review, Petition No. 45-030-02-2-8-00001 et al (October 9, 2007) (“The Petitioner assumes that, because IUOE is a union and a non-profit entity, its union offices, land, and outbuildings are exempt. The Petitioner, however, has offered no statute to support a finding that property used for union purposes is exempt.”); Steelworkers Hall, Inc. v. Porter County Property Tax Assessment Board of Appeals, Indiana Board of Tax Review, Petition No. 64-016-06-2-8-00113 (May 8, 2009) and Union Brotherhood of Carpenters and Joiners of America, Local #1043 v. Porter County Assessor, Indiana Board of Tax Review, Petition No. 64-025-08-2-8-00001 (Dec. 11, 2009). In each case, the Board held that, absent a showing that the property is owned, occupied and predominantly used for an exempt purpose, union property is not exempt.
In a related argument, the Petitioner’s representative contends that the doctrine of “legislative acquiescence” prevents the Board from altering what it referred to as a “long adhered to administrative interpretation.” Petitioner Exhibit 25 at 9. The Indiana Supreme Court’s decision in State Board of Tax Commissioners v. Fraternal Order of Eagles, Lodge No. 255, 521 N.E.2d 678 (Ind. 1988), is the controlling case in determining whether the doctrine of legislative acquiescence applies. In that case, the Fraternal Order of Eagles sought a property tax exemption for its property based on its use for charitable purposes or as a fraternal benefit association. The Tax Court granted the exemption on the basis of legislative acquiescence. However, the Tax Court noted that the evidence presented by the Eagles at the hearing did not support the petitioner’s claim for exemption. The Indiana Supreme Court reversed, finding “there can be little doubt that appellee does not qualify for a tax exemption under the provisions of Ind. Code § 6-1.1-10-23.” 521 N.E.2d at 679. In rejecting the Tax Court’s application of the doctrine of legislative acquiescence, the Supreme Court observed:
If, for instance, in the case at bar the legislature had become alarmed by the fact the taxing authorities were allowing appellee to enjoy a tax free status, what would have been their course of action? The wording of the statute clearly did not apply to appellee's situation. The taxing authorities simply were not following the statute in that instance. Is the legislature to more firmly enact the same general principle? Are they to pass legislation to specifically correct a single situation?”
Id. at 681. According to the Court, “We share Judge Sullivan’s trepidation that to so broaden the doctrine would be to trap administrative agencies in their own mistakes and in the absence of legislative change would force them to continue their errors ad infinitum.”6 Id. Thus, the Petitioner’s argument that the Board is bound to a “long adhered to administrative interpretation” that union property is exempt must fail.
