Wednesday, December 15, 2004

Gee, It Really Was Educational

When I was much younger, I would often read science fiction. This met with a good deal of hostility from my parents who contended that the stuff was trash. My riposte was that it was really quite educational. I'm not at all certain that, at the time, I actually believed my argument, but the Court of Appeals just bought it in the case of Baltimore Science Fiction Society, Inc., v. Dept. of Assessments & Taxation.

BSFS owns a two-story building in Baltimore City. In 2001, it applied for an exemption from real property taxes on the basis that the property was "necessary for and actually used exclusively for a charitable or educational purpose to promote the general welfare of the people of the State" and was owned by "a nonprofit charitable, fraternal, educational, or literary organization." All of the parties conceded that BSFS qualifies as a literary organization. The question before the Court was whether the property was "necessary for and actually used [primarily] for . . . an educational purpose."

The Tax Court found, as a matter of fact, that:
  1. BSFS, among other things, participates in a regional Baltimore Science Fiction Fantasy Conference, organizes writing contests, provides writing workshops and seminars, raises funds, and maintains a lending library.

  2. The property is used for all of the BSFS activities. None of it is used for any other activity. About 20-25% of the building space is used for the storage of supplies and other items necessary for BSFS activities. The lending library takes up another 20-25% of the space. More than 30% is used for group functions, such as workshops and meetings. The building is open only on Saturday, Sunday, and Wednesday evenings, but during those times the public can visit the library or participate in other BSFS activities.

  3. The organization is run entirely by volunteers, who donate time and money. Members of BSFS pay annual dues. Non-members are allowed to use the library and attend all BSFS activities, but they do not usually visit the library or attend meetings.
The SDAT contended that:
[T]he property did not qualify for the tax exemption because it was used primarily as a social or hobby club – that the building is open only on Saturday, Sunday, and Wednesday evening, that some of the organization’s major activities are held off-site or occur only infrequently, that the library is mostly for the members, that the "function" space is for business and social meetings, and that the existence of BSFS and its activities are not well-known to the public. Its witness contended that, because the property was not being used for "systematic instruction," it was not being used for an educational purpose.
The Tax Court agreed with BSFS, rejecting SDAT's suggested definition as being too narrow and limiting and, basically, "unworkable." The Tax Court concluded that requirement that property be principally used for educational purposes did not require that the property be frequently used for educational purposes since "the property, when open, is exclusively used to promote BSFS's educational purpose." The Circuit Court, however, adopted my parents' view that "promoting science fiction is [not] what is deemed to be the operations of an educational institution."

Before the Court of Appeals, SDAT argued that "property is not used for an 'educational purpose' unless it is used for 'systematic instruction' in a 'branch of learning.'" The Court of Appeals rejected this argument and said:
[T]he adjective "educational" cannot be limited in the way posited by SDAT and decreed by the Circuit Court. Formal instruction may be the heart of education, but it is not the entire body. Webster's defines the verb "educate" as "to give knowledge or training to; train or develop the knowledge, skill, mind, or character of, especially by formal schooling or study; teach; instruct." Webster's New Universal Unabridged Dictionary 576 (2nd ed. 1983). That allows for other methods of imparting knowledge and training. Courts have found that a museum may constitute an educational purpose. See Georgia O'Keeffe Museum v. County of Santa Fe, 62 P.3d 754 (N.M. 2002); In re Everson's Will, 52 N.Y.S.2d 395 (N.Y. App. Div. 1944). See also State Tax Comm. v. Whitehall, 214 Md. 316, 323, 135 A.2d 298, 301 (1957) (use of property by Foundation to conduct experiments in breeding of dairy cattle was for charitable and educational purpose; experiments "are comparable to research carried on under grants at universities and add to the dissemination and general store of scientific knowledge"); Oregon Writer's Colony v. Dep't of Revenue, 1996 WL 706994 (Or. Tax), 14 Or. Tax 69 (1996).
See Mom and Dad, whaddid I tell ya'.

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