Opinion letter to Mr. Theodore L. Johnson

JOHN C. DANFORTH ATTORNEY GENERAL _t..iay 19, 1976 OPINION LETTER NO. 3 Mr. Theodore I,. Johnson II I County Counselor, Greene County Post Office Box 4302 G.S· .. Springfield, Missouri 65804 Dear Mr. Johnson: 'I'his opinion letter is in response to your request :Ln which you ask: "Is Springfield vJorkshops, Inc. exempt from real es-Ea·te and personal property taxes?" You have furnished us with information from the attorney for the Springfield Workshops, Inc., which states as follows: "Springfield Workshop, Inc. is a corporation organized under 'General Not For Profit Cor- poration Law' of the State of Missouri. It received its Certificate of Incorporation on January 19, 1966. "Springfield Workshop, Inc. operates under the supervision of the Missouri Department of Educa~ion under the ~revisions of §178.900 to §178.970 V.A.M.S., entitled 'Sheltered Workshops'. It provides work in a sheltered environment for mentally re·tarded and handi- capped persons ~hose limited capabilities make t.hem not employable in competitive busi- ness and industry and unsuited for vocational rehabilit.ation training. Approxima·tely 150 handicapped and retarded persons are employed at the workshop. · Mr. The6dore L. Johnson "The property, in question is U!:ied exclusively for the purposes of the workshop as defined in §178.910 V.A.M.S. Springfield Workshop, Inc. has no shareholders. Its operations are super- vised by an uncompensated Board of Directors. Springfield·Workshop Inc. receives funds from the State of Missouri, currently at the rate of $3.00 per day per handicapped worker, and receives income from the businesses for which it performs services. The money that the workshop receives is used for salaries of the handicapped workers, purchase of its building and operating expenses. "Springfield Workshop, Inc. is exempt from Federal Income Taxes as provided by §501. (c) ( 3) of the Internal Revenue Code which exempt:s corporations operated exclusively for chari- table and educational purposes." 'I'he statutory pro,.rision relative tD such exception is cDn·- tained in subsection 5 of Section 137.100, V.A.M.S., which provides: "'I'he following subjects are exempt from taxation for state, county or local purposes: * * * "(5) All property, real and personal, actually and regularly used exclusively for religious worship, for schools and colleges, or for purposes purely charitable and not held for private or corporate profit, except that the exemption herein granted does not include real property not actually used or occupied for the purpose of the organiza- tion but held or used as investment even though the ·income or rentals received there.,.. from is used wholly for religious, educa- tional or charitable purposes;" It has been said that one ground on which such a statute can be justified in the constitutional sense is that charitable insti-· tutions administer te human and social needs which the. state might .and does undertake to do so that the ultimate obligation of the ~tate is discharged by th~ private charity. Defenders' Townhouse, Inc. v. Kansas City, 441 S.W.2d 365 (Mo. 1969). See also Sec----- tion 6, Article X, Missouri Conititution. - 2 - Mr. Theodore ~. Johnson I·t was also held in Townhouse, that each tax exemption case is peculiarly one which must-be decided upon its own -particular facts. From the Articles of Incorporation and the facts that we have it is clear that the workshop provides an obvious pub- lic service. Further, the Statement of Receipts and Expenditures for the years .1969 through 1975, which has been furnished us, additionally lead us to conclude that the workshop falls within the holding of l'Hssouri Goodwill Industries v. Gruner, 210 S. W. 2d 38 (Mo. 1948), arid is within the tax exemption provisions of Section 137.100. In reaching this conclusion, we recognize that the fact that . the federal government. does no·t tax the income derived from the proper:ty is not persuasive. To_~mhouse, supra. However, it appears reasonable to conclude that such an organization which performs a vital function in providing workshops for handicapped persons under Sections 178.900, et seq., RSMo, would reasonably be a char- itable institution idi thin our tax exemption statutes. In this respect 'de observe that although tax exemption s-tatutes are strictly construed they must nevertheless be reasonably construed. Misso~1ri Goodwill Indu~;tries, supra .. We therefore conclude under the facts furnished us that Springfield \<vorkshops, Inc. is· exempt from taxation pnrsuant to t.he provisions of Section 137.100. Very truly yours, ~cJ..../~ JOHN C. D.ANFORTH Attorney General - 3 -