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November 8, 1994


Appeal from Circuit Court of Sangamon County. No. 93MR342. Honorable Stuart H. Shiffman, Judge Presiding.

Released for Publication December 28, 1994. Petition for Leave to Appeal Denied February 1, 1995.

Justices: Honorable Carl A. Lund, J., Honorable James A. Knecht, J., Honorable Robert W. Cook, J.

The opinion of the court was delivered by: Lund

JUSTICE LUND delivered the opinion of the court:

Plaintiff Immanuel Evangelical Lutheran Church of Springfield (Church) appeals from an order of the circuit court of Sangamon County, affirming the decision of defendant Department of Revenue (Department) in denying an exemption from real estate taxes for a parsonage where plaintiff's minister resides. We affirm.

In April 1991, plaintiff purchased the parsonage located seven or eight blocks from the Church. Plaintiff mortgaged the parsonage to the Lutheran Church-Missouri Synod. In June 1991, plaintiff entered into a contract for deed with plaintiff's minister, the Reverend Theodore Gall, and his wife. The Galls purchased the property for the same amount that plaintiff had paid. The contract required the Galls to assume liability for real estate taxes and required that the property be used as a parsonage. In the event the property was no longer used as a parsonage, or should Gall cease to be plaintiff's pastor, the Galls could pay the balance due on the contract and receive title, or plaintiff would reimburse them for their equity in the property (including any improvements made by them) and the property would revert to plaintiff.

Plaintiff applied for a property tax exemption under section 19.2 of the Revenue Act of 1939 (Act) (35 ILCS 205/19.2 (West 1992) (now 35 ILCS 200/15-40 (West Supp. 1993))), which was approved by the Sangamon County Board of Review. However, the Department denied the exemption on the basis that the primary use of the property was not religious, and it was not an exempt ownership or use. Plaintiff requested a hearing.

At the hearing before an administrative law Judge (ALJ), Harvey Block, president of plaintiff, testified that plaintiff required Gall to live in the parsonage. Plaintiff does not pay Gall a housing allowance, as the purpose of the contract was to provide him with an equity in the property in lieu of paying a housing allowance.

Gall testified that he, along with his wife and son, live in the house. He is required to live there, and the property is plaintiff's only parsonage. Payments on the contract are deducted from his paycheck and sent to the mortgagee. He pays all utilities, with no reimbursement from plaintiff.

The ALJ found that plaintiff purchased the property for the use and benefit of Gall and that he has an equitable ownership interest in the property. Based upon the authority of Christian Action Ministry v. Department of Local Government Affairs (1978), 74 Ill. 2d 51, 383 N.E.2d 958, 23 Ill. Dec. 87, Gall and his wife, for real estate tax purposes, are the owners and, since plaintiff was not the owner, the property did not qualify for the parsonage exemption.

Plaintiff filed an action in the circuit court for administrative review of this decision. The court affirmed the decision, finding that regardless of the ownership question, the property was not being used exclusively for religious purposes, as there is a personal financial benefit to Reverend Gall through building of equity in the property. Plaintiff now appeals this decision.

Statutes granting tax exemptions must be construed strictly in favor of taxation, and the party claiming an exemption has the burden of proving entitlement to the exemption by clear and conclusive evidence. ( Board of Certified Safety Professionals of the Americas, Inc. v. Johnson (1986), 112 Ill. 2d 542, 547, 494 N.E.2d 485, 488, 98 Ill. Dec. 363.) Provisions granting exemption from taxation are to be strictly construed and all doubts are to be resolved in favor of taxation. Rogers Park Post No. 108 v. Brenza (1956), 8 Ill. 2d 286, 290, 134 N.E.2d 292, 295.

The scope of review by a circuit court under the Administrative Review Law (735 ILCS 5/3-101 et seq. (West 1992)), in reviewing factual findings of an administrative agency, is whether those findings were contrary to the manifest weight of the evidence. ( Coler v. Redd (1981), 100 Ill. App. 3d 992, 995, 427 N.E.2d 622, 624, 56 Ill. Dec. 427; American National Bank & Trust Co. v. Department of Revenue (1993), 242 Ill. App. 3d 716, 721, 611 N.E.2d 32, 36, 183 Ill. Dec. 179.) However, where the facts are undisputed, as here, a determination of whether property is exempt from ...

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