Section 22 What Is Charitable?

• Library: Tax Law 2009

Because of the numerous advantages, including sales tax exemption, arising from such a characterization, many nonprofit organizations will claim charitable status. These organizations will cover a spectrum of activity and function. An examination of real property tax exemption cases reveals an increasingly expansive definition of charity. Indeed, recognition that organizations are charitable, even though their function may not be directed primarily to relief of the indigent, has been tacitly recognized by MoDOR in its repeal of its somewhat restrictive

criteria, 12 C.S.R. § 10-3.378 (rescinded December 11, 1980), for determining whether an organization is charitable.

The St. John’s Medical Center, Inc. v. Spradling, 510 S.W.2d 417 (Mo. 1974), decision utilized the technique of examining real property decisions to provide guidance in determining whether an entity is “charitable.” Property tax decisions have held that the operation of a summer camp for which most campers pay fees and the operation of a private apartment building for rent-paying elderly fall within the concept of charity. In Jewish Community Centers Ass’n v. State Tax Commission of Missouri, 520 S.W.2d 23 (Mo. 1975), the Supreme Court repudiated the archaic concept that a charity only provides “free” care of or services to the indigent. The Court observed that “a charitable institution does not lose its character and consequent tax exemption merely because recipients of its benefits who are able to pay are required to do so...