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Inter-varsity Christian Fellowship v. Hoffman

OPINION FILED AUGUST 2, 1978.

INTER-VARSITY CHRISTIAN FELLOWSHIP OF THE UNITED STATES OF AMERICA, PLAINTIFF-APPELLANT,

v.

ELMER J. HOFFMAN, COUNTY TREASURER FOR THE COUNTY OF DU PAGE, DEFENDANT-APPELLEE.



APPEAL from the Circuit Court of Du Page County; the Hon. JAMES E. FITZGERALD, Judge, presiding.

MR. JUSTICE GUILD DELIVERED THE OPINION OF THE COURT:

This action is purportedly an appeal from three cases in the Circuit Court of Du Page County. Case No. 69 PT 31355 was an action by the People of the State of Illinois against Inter-Varsity Press, a division of Inter-Varsity Christian Fellowship of the United States of America (hereinafter Inter-Varsity) for the collection of 1968 personal property taxes. Case No. 70-843 G was a suit by Inter-Varsity for a perpetual injunction against the collection of personal property taxes. Lastly, case No. 72 PT 10977 was an action by the People against Inter-Varsity for the collection of 1970 personal property taxes. The transcript on cause 70-843 G has been furnished this court. On December 1, 1976, the trial court, stating that 70-843 G and 69 PT 31355 had been consolidated, denied Inter-Varsity's prayer for injunction and found that Inter-Varsity was not entitled to a tax exemption as a charitable, religious or education corporation.

Both the People and Inter-Varsity have agreed in their briefs and at oral argument that the decision herein should apply to all three cases. However, that is not possible in view of the pleadings before us. We have a final order as to the two cases but we do not have any order relating to cause No. 72 PT 10977. It is, therefore, presumed that this cause is still pending in the Circuit Court of Du Page County. If such be the case, our decision herein is controlling as to the disposition of that case by proper proceedings in the circuit court.

The issues presented are (1) whether Inter-Varsity is a charitable organization, exempt from taxation by the provisions of section 19.7 of the Revenue Act of 1939 (Ill. Rev. Stat. 1967, ch. 120, par. 500.7); (2) whether it is exempt from taxation under section 19.2 of the Revenue Act of 1939 (Ill. Rev. Stat. 1967, ch. 120, par. 500.2) as a religious organization, the property of which is used exclusively for religious purposes; and (3) whether an unreasonable length of time elapsed between the hearing date and the date of judgment, entitling Inter-Varsity to a new trial. The final hearing on these cases took place on August 1, 1975, and the trial court did not render a decision until December 1, 1976, 16 months later. We need not reach this last issue in view of our decision herein.

Inter-Varsity was organized in 1941 as Inter-Varsity Christian Fellowship, the name subsequently being changed to Inter-Varsity Christian Fellowship of the United States of America. The object of this not-for-profit corporation is found in the charter thereof, reading as follows:

"The purpose of the Corporation is to establish, assist, and encourage at colleges, universities, nursing schools, and other comparable educational institutions in the United States of America groups of students and faculty members to witness to the Lord Jesus Christ as God Incarnate and have these major objections: (1) To lead others to personal faith in Christ as Lord and Saviour. (2) To help Christians grow toward maturity as disciples of Christ, by study of the Bible, by prayer and by Christian fellowship. (3) To present the call of God to the world mission of the Church; to help students and faculty to discover God's role for them."

In the hearing before the trial court the evidence disclosed that Inter-Varsity has about 900 affiliated student chapters at colleges in the United States. The headquarters of Inter-Varsity is located in Madison, Wisconsin, and the literature division, which is the subject of this controversy, is located in Downers Grove, Illinois. The literature division prepares but does not print numerous religious publications. The cost of publication determines the cost of each item. The majority of the publications thus produced are sold by Inter-Varsity but approximately 10% are given away, some of these to prisons and students on campus. Other books are sold at half price to individuals with the idea that they will then give the books away. The proceeds from the sale of the publications are used to publish and disseminate additional literature. No net profit, per se, is realized on the sale of the publications. Indeed, the cost of the literature appears to consistently exceed the revenue from its sale. Donations to the literature division account for whatever apparent "profit" is generated by the division. In this regard we note that donations constitute a considerable portion of the annual budget of Inter-Varsity. They are received from over 300,000 donors, including churches of approximately 50 different denominations. In illustration, the record reveals that in 1974 these donations, gifts and grants made up 55% of Inter-Varsity's total revenue of $5,652,282. Finally, as to Inter-Varsity's corporate structure, we note that it has neither shareholders, dividends, capital stock nor accumulations for future dissemination.

• 1 We begin our analysis with the premise that statutes providing exemption from taxation shall be strictly construed because under the Illinois Constitution all property is subject to taxation unless exempted by the legislature.

Section 3 of article IX of the Illinois Constitution of 1870 provided that:

"The property of the State, counties, and other municipal corporations, both real and personal, and such other property as may be used exclusively for agricultural and horticultural societies, for school, religious, cemetery and charitable purposes, may be exempted from taxation; but such exemption shall be only by general law."

In the 1970 Constitution, section 6 article IX provides:

"The General Assembly by law may exempt from taxation only the property of the State, units of local government and school districts and property used exclusively for agricultural and horticultural societies, and for school, religious, cemetery and charitable purposes."

Section 19.2 of the Revenue Act of 1939 (Ill. Rev. Stat. 1967, ch. 120, par. 500.2) exempts from taxation "[a]ll property used exclusively for religious purposes, or used exclusively for school and religious purposes * * *." Section 19.7 of the Act (Ill. Rev. Stat. 1967, ch. 120, par. 500.7) exempts from taxation:

"All property of institutions of public charity, all property of beneficient and charitable organizations, * * * when such property is actually and exclusively used for such charitable or beneficient purposes, and not ...


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