Appeal from Circuit Court of Vermilion County. No. 93L68. Honorable Thomas J. Fahey, Judge Presiding.
Justices: Honorable Carl A. Lund, J. Honorable Robert J. Steigmann, J., Concurring. Honorable John T. McCULLOUGH, J., Dissenting. (Written Dissent to follow). Justice Lund delivered the opinion of the court:
The opinion of the court was delivered by: Lund
JUSTICE LUND delivered the opinion of the court:
Plaintiff Vermilion County Museum Society (Society), an Illinois not-for-profit corporation, sought a real estate tax exemption for a parking lot area adjoining the Society's historical Fithian House (built in the 1850's and now used as a museum). In August 1991, the Vermilion County Board of Review (Board of Review) recommended approval of the exemption, but review by the Illinois Department of Revenue (Department) resulted in a denial in March 1993. In April 1993, the Society appealed the decision of the Department to the circuit court of Vermilion County. That court reversed and ordered the exemption. The Department appeals.
The Department contends that the property in question was not charitable property because the Society failed to meet four of six criteria as set forth by the Supreme Court of Illinois in Methodist Old Peoples Home v. Korzen (1968), 39 Ill. 2d 149, 233 N.E.2d 537.
We first address an issue that has vaguely been suggested by the Department. This case arose when the Society sought an exemption status for the parking lot based upon section 19.16 of the Revenue Act of 1939 (Act) (Ill. Rev. Stat. 1991, ch. 120, par. 500.16 (now recodified as amended in section 15-125 of the Property Tax Code (Code) (35 ILCS 200/15-125 (West 1994)) (parking areas for exempt institutions)). The museum property had been removed from tax roles several years earlier. Whether the Department was involved as required by section 108(6) of the Act (Ill. Rev. Stat. 1991, ch. 120, par. 589(6) (now recodified as amended in section 16-70 of the Code (35 ILCS 200/16-70 (West 1994))) has not been established, though the Department claims it was not so involved.
This question was not originally listed as an issue on appeal, but has now been suggested. Evidently, the Board of Review was involved in the earlier removal from the tax roles, as required by section 108(6) of the Act. This section requires the Board of Review to determine the application for exemption and, then, to have its clerks forward "a full and complete statement of all the facts ***" to the Department and "the Department shall then determine whether such property is or is not legally liable to taxation." (Ill. Rev. Stat. 1991, ch. 120, par. 589(6).) It would appear that any fault for not forwarding the matter to the Department, or the Department's subsequent failure to act, would not be the responsibility of the real estate owner. We have determined that the issue of propriety for exemption of real estate where the Fithian House is located is not before us.
In making this determination, we are at a loss to find a way to remove a property from taxable status, at the county level, without the involvement of the Board of Review. Considering the effect of the Board of Review's action, without review by the Department we turn to section 108(6) of the Act, which states,
"The board of review shall hear and determine the application ***. *** The decision of the board shall not be final ***. *** The Department shall then determine whether such property is or is not legally liable to taxation. It shall notify the board of review of its decision, and the board shall correct the assessment accordingly if necessary." (Emphasis added.) (Ill. Rev. Stat. 1991, ch. 120, par. 589(6).)
Review provisions for the Department decisions are then set forth and a provision prohibiting delay of extension of taxes is provided. We conclude, absent any authority to the contrary, that the Board of Review determination is effective until the Department determines the Board of Review was in error and "corrects the assessment." The tax exempt status, once determined by the Board of Review, is in effect until corrected. This case involves the parking lot. There has not been a prior Department determination which "corrects the assessment" of the Society's museum. Exemption relating to the parking lot should not be prohibited because of a nonexistent Department order. Parking lots for charitable exempt property are also subject to exempt status. Ill. Rev. Stat. 1991, ch. 120, par. 500.16.
However, in claiming the parking lot should not be exempt, the Department argues the Society, an Illinois not-for-profit corporation, does not qualify as a "charitable institution" under section 19.16 of the Act. In the interest of judicial economy, we address this issue. The Department agrees that a parking lot for the use of a "charitable institution" is property exempted. (See Northwestern Memorial Foundation v. Johnson (1986), 141 Ill. App. 3d 309, 313, 490 N.E.2d 161, 164, 95 Ill. Dec. 688.) The Department also agrees that museums used for the public learning can be considered "charitable institutions."
Both the Society and the Department agree that the standard of review is de novo ( S.B. Lexington, Inc. v. Near North Insurance Agency, Inc. (1993), 244 Ill. App. 3d 1023, 1030, 614 N.E.2d 234, 238, 185 Ill. Dec. 100), and that the Society has the burden of proving the charitable exemption status ( Harrisburg-Raleigh Airport Authority v. Department of Revenue (1989), 126 Ill. 2d 326, 331, 533 N.E.2d 1072, 1074, 127 Ill. Dec. 944).
In Decatur Sports Foundation v. Department of Revenue (1988), 177 Ill. App. 3d 696, 708, 532 N.E.2d 576, 585, 126 Ill. Dec. 891, our court set forth the Korzen criteria as follows:
"These characteristics have evolved into the following test: (1) the benefits derived are for an indefinite number of persons; (2) the organization has no capital, capital stock or shareholders, and does not profit from the enterprise; (3) funds are derived mainly from private and public charity, and the funds are held in trust for the objects and purposes expressed in the charter; (4) the charity is dispensed to all who need and apply for it; (5) no obstacles appear to be placed ...