Section 40 Controlling Factors

LibraryTax Law 2009

While any discussion of controlling factors must be had in view of Franciscan Tertiary Province of Missouri, Inc. v. State Tax Commission, 566 S.W.2d 213 (Mo. banc 1978), and Barnes Hospital v. Leggett, 589 S.W.2d 241 (Mo. banc 1979), general areas remain the same.

To prevail on the exemption claim, an actual and regular use for the purely charitable purpose will have to be shown. Traditionally, such a purpose has been generally defined in terms of acts or obligations that, absent a private contribution, the state itself would appropriately bear. The operation must be shown to be on a not-for-profit basis, and the dominant use must be for the benefit of an indefinite number of people, directly and indirectly benefitting society in general. Barnes Hosp., 589 S.W.2d 241. Although Franciscan, 566 S.W.2d 213, eliminated any further questions as to whether profit in a given year will necessarily destroy exempt status, the fact that making a profit cannot be the taxpayer’s goal is beyond question. Not only should counsel be prepared to demonstrate that the taxpayer-claimant is not profit-oriented, counsel will also have to show that any profit realized is an incidental achievement and that this profit is channeled into the charitable purpose of the taxpayer and the property sought to be qualified.

In Sunday School Board of Southern Baptist Convention v. Mitchell, 658 S.W.2d 1 (Mo. banc 1983), the Court held that a Sunday school board operating a religious book store, although a not-for-profit organization, was not operating the store for purely charitable purposes and was not entitled to an...

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