No. 98,443
IN THE COURT OF APPEALS OF THE STATE OF KANSAS
In the Matter of the Application of
WESTBORO BAPTIST CHURCH FOR
EXEMPTION FROM AD VALOREM TAXATION
IN SHAWNEE COUNTY, KANSAS.
SYLLABUS BY THE COURT
1. In an exemption case, all real and personal property in Kansas shall be subject to taxation unless expressly exempted. K.S.A. 79-101. Thus, taxation is the rule, and exemption from taxation is the exception under the Kansas Constitution and statutes.
2. The burden of establishing an exemption from taxation is on the party requesting the exemption.
3. Constitutional and statutory provisions exempting property from taxation are strictly construed against the one claiming the exemption.
4. Under both the Kansas Constitution and K.S.A. 79-201 Second, property used exclusively for religious purposes is exempt from property taxation.
5. Not every use of property affiliated with a religious organization may qualify as property used exclusively for a religious purposes.
6. The First Amendment to the United States Constitution guarantees religious freedom, which is divided into two provisions: the first in the Establishment Clause and the second in the Free Exercise Clause. The basic purpose of the two First Amendment provisions is to insure that no religion be sponsored or favored, none commanded, and none inhibited.
7. The Free Exercise Clause of the First Amendment secures the right of religious belief and the right to practice and spread one's faith unrestricted by state and federal legislative actions.
8. The Free Exercise Clause of the First Amendment does not require the state to grant exemptions to religious organizations from generally applicable taxes. Tax exemptions are a matter of grace that state and federal legislatures may disallow as they choose.
9. There are three tests that a government regulation or law must pass if it is challenged under the Establishment Clause: (1) the statute must have a secular legislative purpose; (2) the statute's primary effect must be one that neither advances nor inhibits religion; and (3) the statute must not produce an excessive government entanglement with religion.
10. State property tax exemptions that benefit religious organizations do not violate the Establishment Clause of the First Amendment.
11. The necessities of revenue collection through a sound tax system raise governmental interests sufficiently compelling to outweigh the free exercise rights of those who find the tax objectionable on bona fide religious grounds.
12. Unlike mere regulatory interaction, state action that involves interpreting and weighing church doctrine violates the entanglement clause of the Establishment Clause of the First Amendment. Moreover, a court should not normally, over the objection of a party, label as nonreligious the statement or actions of that party.
13. In a sense, everything a deeply devout person does has a religious purpose. But if that formulation determined the exemption from property taxes, religious identity would effectively be the sole criterion.
14. Governments depend upon tax revenues to furnish services essential for the welfare of all people. If churches or individuals could, by self-proclamation avoid the payment of taxes, good order in this country would be in jeopardy.
15. Only beliefs rooted in religion are protected by the Free Exercise Clause of the First Amendment.
16. Purely secular views are not protected by the Free Exercise Clause of the First Amendment.
17. Affairs of government and politics are secular activities.
18. In balancing the government's interest in collecting taxes, a government has a right to make a limited inquiry into the activities of a religious organization.
19. When a party asserts a belief that seems to be far more the product of a secular philosophy than of a religious orientation, a free exercise claim cannot be maintained.
20. The attachment of a religious belief onto an otherwise secular activity, such as politics or a political activity, does not establish a free exercise claim.
Appeal from Kansas State Board of Tax Appeals. Opinion filed July 25, 2008. Affirmed.
Margie J. Phelps, of Topeka, and Rebekah A. Phelps-Davis, of Phelps-Chartered, of Topeka, for appellant Westboro Baptist Church.
Shawn S. Leisinger, assistant of county counselor, and Richard V. Eckert, county counselor, for appellee Board of Shawnee County Commissioners.
Before McANANY, P.J., GREEN and CAPLINGER, JJ.
GREEN, J.: Westboro Baptist Church (WBC) appeals from an order of the State Board of Tax Appeals (BOTA) denying its application for exemption from ad valorem taxes for its 2002 Ford F-150 truck. WBC argues that BOTA erroneously interpreted and applied the law pertaining to its application when it determined that WBC was not entitled to a personal property exemption under K.S.A. 79-201 Second. In particular, WBC maintains that because it used the truck in its religious activities, BOTA's decision was erroneous. Moreover, WBC maintains that BOTA improperly labeled as nonreligious many of its signs in violation of the Establishment Clause of the First Amendment to the United States Constitution. We agree. Nevertheless, we determine that BOTA's decision, even though improper, may be upheld for another reason. We further determine that WBC's political activities and secular philosophy, which constitute a significant part of its picketing activities, preclude a tax exemption for its truck. Accordingly, we affirm.
WBC is an independent church based in Topeka, Kansas. Nearly all of the approximately 70 WBC members participate in an activity alternatively referred to by WBC members as "picketing" and "street ministry." This activity consists of transporting handmade signs to various locations around the country, including churches, military funerals, government offices, political conventions, and other locations. The signs generally express in acrimonious language the WBC's religious message regarding "whether and who God loves or hates." WBC members believe that they are God's messengers on earth, and it is their duty to publish the message that God has punished and will continue to punish the United States because of the country's willingness to condone homosexuality.
WBC filed an application for a tax exemption before BOTA in 2002 for a 2002 Ford F-150 truck purchased August 31, 2002. According to the application, the truck was to be used exclusively for WBC's street ministry and qualified for exemption under the religious use exemption set forth in the Kansas Constitution and K.S.A. 79-201 Second.
Prior Appeals
WBC has had two previous appeals before this court relating to religious use personal property exemptions for the 1995 Ford F-150 pickup truck it formerly used to transport signs. In WBC's first application, WBC requested a religious use exemption for a 1995 Ford F-150 pickup truck used to transport signs for its street ministry picketing activities. In denying the exemption, BOTA determined that the truck had not been used exclusively for religious purposes because it had regularly carried signs containing nonreligious messages. WBC appealed BOTA's ruling, arguing that BOTA had erred in determining that the nonreligious use of the vehicle had not been minimal in scope and insubstantial in nature. WBC also challenged the constitutionality of BOTA's decision. This court determined that WBC had failed to meet its burden to show how the signs transported in the truck clearly fell within the religious use exemption. Because WBC failed to meet its burden of proof, this court declined to address its constitutional arguments. Westboro Baptist Church, Inc. v. Hixon, case No. 81,993, unpublished opinion, filed February 18, 2000, slip op. 4-5.
In 2001, WBC's request for tax exempt status for their 1995 Ford pickup truck again came before BOTA. Before BOTA ruled on the application, however, WBC moved to voir dire all BOTA members about whether the members had ever made any statements, signed any written documents, or read any information about WBC's picketing activities. BOTA denied the motion, and WBC moved to reconsider and to stay the tax proceeding until it could pursue an interlocutory appeal. BOTA denied reconsideration but stayed the tax proceeding pending the interlocutory appeal. WBC filed a petition for mandamus or, alternatively, for declaratory or injunctive relief, in the district court against four members of BOTA. In the action, WBC asked for an order requiring the four members to answer the proffered voir dire questions. Moreover, WBC's petition alleged a cause of action under 42 U.S.C. § 1983 (2000). BOTA moved to dismiss for lack of jurisdiction. BOTA argued that WBC had failed to exhaust its administrative remedies, specifically K.S.A. 2003 Supp. 77-514, which governs disqualification of a BOTA member. The district court dismissed WBC's claim for lack of subject matter jurisdiction due to WBC's failure to exhaust administrative remedies, and this court affirmed on appeal. Westboro Baptist Church, Inc. v. Patton, 32 Kan. App. 2d 941, 93 P.3d 718, rev. denied 278 Kan. 852 (2004).
Present Appeal
In WBC's present application for tax exemption, WBC requested exemption for its newly purchased 2002 truck. Before the hearing on the application, WBC moved to clarify the issue to be argued at the hearing. In response, BOTA issued an order stating that the issue to be argued at the hearing was "'whether the subject properties are used exclusively for religious purposes'" and that "[w]hat constitutes a 'religious purpose' is a legal and factual issue for the Board's determination."
WBC submitted exhibits with all of the slogans they have used over the years in their street ministry and an exhibit enumerating several examples of biblical prophets preaching to government officials. WBC member Katherine Hockenbarger explained she had created the exhibit by organizing all of the signs alphabetically and by subject matter into the following categories: "America," "Churches," "General Doctrinal," "God's Punishment," "Homosexuals," "Institutions," "Other Countries," and "Public Figures." Hockenbarger and fellow WBC member Shirley Phelps-Roper described the process for creating a sign and selecting a picketing target. According to Hockenbarger, any member of WBC could suggest a message to put on a picketing sign. She described it as a collaborative process that did not require any type of centralized approval. According to Phelps-Roper, WBC members communicated either orally or in written e-mails when something would come up in the newspaper. Anyone could suggest a place to picket although the members did not always discuss the targets or act on a recommendation. Hockenbarger said WBC published its message anywhere there were people to hear it, such as political, entertainment, or religious events.
Hockenbarger testified that she had been a member of the church for 8 years, picketed nearly every day, and had participated in the WBC's picketing since WBC began picketing 15 years ago. Hockenbarger stated that she did not believe the signs expressed a political viewpoint and that she did not carry them for a political purpose. Instead, her "goal [was] simply to tell the people how things [were] and how they should be properly living their lives." For an example of where WBC would picket, Hockenbarger stated that WBC had picketed the Democratic and the Republican conventions. She denied that the purpose of the picketing was political. Hockenbarger explained: "The purpose was to publish a message, particularly about the candidates that were to be nominated, to make sure that people understood the ramifications of putting a person into a place of power that doesn't serve the Lord their God." In reference to a sign about a local political figure, Hockenbarger explained why she believed the sign about the political figure was not political in nature:
"[T]he reason that we hold it isn't because we are–we care about the politics of it. We care about the mores of our society. We care about the moral issues of when you select a person to hold a position of power that is an open, out of the closet lesbian and what that teaches our children and that teaches them that that is a perfectly acceptable life-style and God Almighty said it's not."
Hockenbarger denied she expected to have any influence on the political outcome; in fact, she fully expected the person would still be put into office. Hockenbarger stated that she believed 99% of the time, the picketing had no influence on whether a community continued to support the targeted individual or organization.
Elizabeth Phelps, a member of the church, also testified that WBC's picketing activities were not done to influence government officials or change their behavior. Phelps testified that her decision to picket was based on Bible scriptures of prophets, apostles, and Christ. She maintained that the scriptures showed that Christ, apostles, and prophets spoke directly to the leaders of their day. Phelps testified that she sincerely held to her beliefs and that the passages helped form her decisions on whom to picket.
While Phelps testified that she voted and participated in politics, she maintained that those activities were unrelated to the picketing and did not involve use of WBC's truck. Phelps denied engaging in politics on behalf of WBC and stated that when she does engage in political activity she uses her own resources.
Based on the evidence presented at the hearing, BOTA found it was undisputed that WBC had used the truck exclusively, actually, and regularly to facilitate WBC's picketing activities by transporting church members and signs. Nevertheless, BOTA noted it was less clear whether the picketing activities served an exclusively religious purpose within the meaning of K.S.A. 79-201 Second. BOTA acknowledged that WBC members sincerely believed that all of their signs conveyed their religious beliefs, even though a large number of the signs made no reference to their doctrine or anything remotely religious. BOTA stated that of the 602 examples of WBC's picket signs listed in the exhibits, at least 260 simply labeled public figures and institutions with terms such as "fag," "dyke," "whore," "pervert," or "Nazi."
In its analysis, BOTA relied on our Supreme Court's definition of religion as stated in Trustees of The United Methodist Church v. Cogswell, 205 Kan. 847, 852, 473 P.2d 1 (1970). In Cogswell, citing Davis v. Beason, 133 U.S. 333, 33 L. Ed. 637, 10 S. Ct. 299 (1890), our Supreme Court defined religion as "being an apprehension, awareness or conviction of the existence of a supreme being controlling one's destiny." "'The term "religion" has reference to one's views of his relations to his Creator, and to the obligations they impose of reverence for his being and character, and of obedience to his will.' [Citation omitted.]" 205 Kan. at 852.
BOTA analyzed whether the signs fell within the definition of religion and stated:
"On their face, these labeling signs convey no message, doctrine, position or opinion falling within Cogswell's broad definition of 'religion.' Merely stating that an individual or institution is a 'fag' or 'dyke' or supporter thereof, while potentially inflammatory, does not reflect 'one's views of his relations to his Creator, and to the obligations they impose of reverence for his being and character, and of obedience to his will.' 205 Kan. at 852. While accepting that the applicant believes the signs convey their sincerely-held religious message, the Board finds that these signs in fact convey no religious message and thus serve no religious purpose."
Because BOTA found that WBC had failed to show that the truck was used to transport only signs conveying a religious message to street-side display locations, BOTA held that the truck did not qualify for the exclusively religious use property tax exemption. BOTA further found that because the nonreligious signs represented over 40 percent of WBC's signs, the truck did not qualify for the exception found in subsection (c) of K.S.A. 79-201 Second which extends the exemption to properties used for a nonexempt purpose when the use was minimal in scope and insubstantial in nature.
WBC moved for reconsideration. In the motion, WBC contested BOTA's conclusion that some of the signs conveyed nonreligious messages. WBC maintained that it had satisfied its burden to show the religious nature of its picketing activity. WBC asked BOTA to explain its reasoning for asserting no First Amendment to the United States Constitution issue was involved, and WBC further asserted that BOTA had violated the Free Exercise Clause of the First Amendment by attempting to determine whether the words from WBC's picketing signs were religious. WBC cited biblical passages employing the words singled out by BOTA as nonreligious and explained the religious meaning and etymology of the words. WBC challenged BOTA to specifically identify the 40 percent of the signs which had no religious meaning and requested the opportunity to explain the religious meaning behind the words used in those signs.
Finding WBC had failed to raise any persuasive argument in its motion to reconsider, BOTA denied the motion.
Did BOTA Err as a Matter of Law by Denying the Exemption?
On appeal, WBC argues that BOTA erroneously characterized WBC's picketing activity as nonreligious. WBC maintains that BOTA should have deferred to WBC's subjective interpretation of what constitutes a religious purpose, focusing on the sincerity of WBC's members' beliefs that the content of their picketing signs fulfill the religious purpose of their street ministry.
The standard of judicial review of an administrative agency action is defined by the Kansas Act for Judicial Review and Civil Enforcement of Agency Actions (KJRA), K.S.A. 77-601 et seq. National Council on Compensation Ins. v. Todd, 258 Kan. 535, 538, 905 P.2d 114 (1995). The applicable standard of review for a BOTA order is governed by K.S.A. 77-621(c), which provides that this court may grant relief if it determines any one or more of the following:
"(1) The agency action, or the statute or rule and regulation on which the agency action is based, is unconstitutional on its face or as applied;
"(2) the agency has acted beyond the jurisdiction conferred by any provision of law;
"(3) the agency has not decided an issue requiring resolution;
"(4) the agency has erroneously interpreted or applied the law;
"(5) the agency has engaged in an unlawful procedure or has failed to follow prescribed procedure;
"(6) the persons taking the agency action were improperly constituted as a decision-making body or subject to disqualification;
"(7) the agency action is based on a determination of fact, made or implied by the agency, that is not supported by evidence that is substantial when viewed in light of the record as a whole, which includes the agency record for judicial review, supplemented by any additional evidence received by the court under this act; or
"(8) the agency action is otherwise unreasonable, arbitrary or capricious."
In its first issue, WBC argues that BOTA erroneously interpreted or applied the law under subsection (4). Whether certain property is exempt from ad valorem taxation is a question of law if the facts are agreed upon, but it is a mixed question of law and fact if the facts are controverted. In re Tax Exemption Application of Via Christi Regional Med. Ctr., 27 Kan. App. 2d 446, 447, 6 P.3d 896 (2000) (citing T-Bone Feeders, Inc. v. Martin, 236 Kan. 641, 645, 693 P.2d 1187 (1985). Here, the underlying facts are not disputed. Instead, WBC disputes BOTA's interpretation of the facts. Therefore, this appeal presents a question of law.
The determination of whether WBC's use of the truck fulfills a religious purpose as a matter of law implicates both the rules of statutory interpretation and an analysis of the First Amendment to the United States Constitution. To the extent this appeal requires construction and application of a tax exemption statute, the general rules for statutory construction are applicable. The fundamental rule of statutory construction is that the intent of the legislature governs if that intent can be ascertained. The legislature is presumed to have expressed its intent through the language of the statutory scheme. Ordinary words are given their ordinary meanings. When a statute is plain and unambiguous, the court must give effect to the intention of the legislature as expressed, rather than determine what the law should or should not be. Winnebago Tribe of Nebraska v. Kline, 283 Kan. 64, 77, 150 P.3d 892 (2007).
In exemption cases, taxation is the rule, and exemption is the exception. Constitutional and statutory provisions exempting property from taxation are to be strictly construed against the party claiming exemption, and all doubts are to be resolved against exemption. In re Tax Application of Lietz Constr. Co., 273 Kan. 890, 904-05, 47 P.3d 1275 (2002); Tri-County Public Airport Auth. v. Board of Morris County Comm'rs, 245 Kan. 301, 304-05, 777 P.2d 843 (1989). BOTA is a specialized agency that exists to decide taxation issues and is considered the paramount taxing authority in Kansas. Appellate courts grant BOTA's decisions great weight and deference when it is acting in its area of expertise. The party challenging BOTA's decision has the burden to prove that the action taken was erroneous. Nevertheless, if BOTA's interpretation of law is erroneous as a matter of law, appellate courts will take corrective steps. In re Tax Appeal of Sprint Communications Co., 278 Kan. 690, 694-95, 101 P.3d 1239 (2004).
All property in Kansas, real and personal, that is not expressly exempt by statute is subject to taxation. K.S.A. 79-101. Under both the Kansas Constitution and K.S.A. 79-201 Second, property used exclusively for religious purposes is exempt from property taxation. Our Constitution states:
"All property used exclusively for state, county, municipal, literary, educational, scientific, religious, benevolent and charitable purposes, farm machinery and equipment, merchants' and manufacturers' inventories, other than public utility inventories included in subclass (3) of class 2, livestock, and all household goods and personal effects not used for the production of income, shall be exempted from property taxation." Kan. Const. Art. 11, § 1(b) (2007 Supp.).
While the legislature can broaden the exemption permitted by the constitution, it cannot limit or curtail the constitutional provisions. Cogswell, 205 Kan. at 853. Consequently, K.S.A. 79-201 Second also exempts property used exclusively for religious purposes. Moreover, in 1986 the legislature permissibly extended the exemption to properties used for a nonexempt purpose when the use was minimal in scope and insubstantial in nature, but only if the use was incidental to religious purposes. L. 1986, ch. 369, § 1. K.S.A. 79-201 Second states in part:
"All real property, and all tangible personal property, actually and regularly used exclusively for literary, educational, scientific, religious, benevolent or charitable purposes, including property used exclusively for such purposes by more than one agency or organization for one or more of such exempt purposes. Except with regard to real property which is owned by a religious organization, is to be used exclusively for religious purposes and is not used for a nonexempt purpose prior to its exclusive use for religious purposes which property shall be deemed to be actually and regularly used exclusively for religious purposes for the purposes of this paragraph, this exemption shall not apply to such property, not actually used or occupied for the purposes set forth herein, nor to such property held or used as an investment even though the income or rentals received therefrom is used wholly for such literary, educational, scientific, religious, benevolent or charitable purposes. . . . This exemption shall not be deemed inapplicable to property which would otherwise be exempt pursuant to this paragraph because an agency or organization: . . . (c) uses such property for a nonexempt purpose which is minimal in scope and insubstantial in nature if such use is incidental to the exempt purposes of this paragraph."
See Woman's Club of Topeka v. Shawnee County, 253 Kan. 175, 187, 853 P.2d 1157 (1993) (noting that prior to the legislature's modification of the statute in 1986, the exemption statute mirrored the Kansas constitutional provision and provided exemption only when the subject property was used exclusively for the exempt purpose); Midwest Presbytery v. Jefferson County Appraiser, 17 Kan. App. 2d 676, 677-79, 843 P.2d 277 (1992) (addressing the 1986 amendment to 79-201 Second as an issue of first impression and holding use of religious property as a residence did not defeat the exclusive use requirement as a matter of law).
In Cogswell, 205 Kan. 847, which BOTA cited in its order denying the exemption, the court defined a religious purpose in the context of the tax exemption statute. In that case, the court had to determine whether the United Methodist Church's administration offices satisfied the religious purpose language of the exemption statute. In Cogswell, the court defined the term "religious" as follows:
"[T]he adjective form of the word 'religion' [is] defined as being an apprehension, awareness or conviction of the existence of a supreme being controlling one's destiny. [Citation omitted.] . . .
'It has been held that "religion" has reference to man's relation to Divinity; to reverence, worship, obedience, and submission to the mandates and precepts of supernatural or superior beings. In its broadest sense it includes all forms of belief in the existence of superior beings, exercising power over human beings by volition, imposing rules of conduct with future rewards and punishments. [Citations omitted.]'
. . . .
'The term "religion" has 'reference to one's views of his relations to his Creator, and to the obligations they impose of reverence for his being and character, and of obedience to his will.' . . . [Citation omitted.]" 205 Kan. at 852.
The court noted it had always employed the term "religious" broadly and in light of the foregoing definitions. 205 Kan. at 852. Nevertheless, in determining that the administration building satisfied the exemption statute, the court examined the underlying activities conducted in the administration building:
"[T]here is nothing to show that any part of the use of the building in the administration of the Conference activities embraced political action or activities which would remove the property from its tax exempt status. But if it can be said educational, benevolent and charitable purposes are embraced within the administrative activities of the Conference in using the property for religious purposes, the use of the property for such purposes, on the facts here presented, is likewise exempt from taxation under the constitution." 205 Kan. at 861.
Thus, the court emphasized that all of the activities occurring in the administration building satisfied benevolent, charitable, and educational purposes, which were exempt from taxation under the constitution, in using the property for religious purposes and that none of the church's activities in the administration building were political. 205 Kan. at 861
Similarly, Kansas courts have seemed to focus on the activities of an organization in determining whether the organization qualifies for exemption from payment of property taxes. For example, in National Collegiate Realty Corp. v. Board of Johnson County Comm'rs, 236 Kan. 394, 400, 690 P.2d 1366 (1984), the court declined to define the term "educational" and instead focused "on whether any activities in the use of the property were not exclusively for educational or other exempt purposes." In finding that the regulation of extracurricular intercollegiate athletic events was equivalent to teaching physical education, our Supreme Court determined that the purpose of the National Collegiate Athletic Association was educational. 236 Kan. at 404.
Likewise, in In re Tax Exemption Application of Fire Baptized Holiness Church, 28 Kan. App. 2d 598, 18 P.3d 308 (2001), the court evaluated the function of the property. The church sought a religious use tax exemption for a dormitory building which housed high school students, "dorm parents", and a cafeteria for elementary and high school students. BOTA denied the exemption, finding the dormitory's primary use was as a dormitory, a noneducational use. On appeal, the court noted that Kansas courts have endorsed a broad definition of education and cited several examples. Although the court held the occupancy of a residence did not by itself constitute an educational or religious use, the underlying purpose of the dormitory was for education because the dormitory building housed only students who attended the school and dorm parents whose duty it was to monitor the students. Students used the building every day for lunch and occasionally for physical education and music classes. Therefore, the court reversed BOTA's denial of the exemption. 28 Kan. App. 2d at 602; see also Sigma Alpha Epsilon Fraternal Ass'n v. Board of County Comm'rs, 207 Kan. 514, 519, 485 P.2d 1297 (1971) (holding that a college fraternity was not used exclusively for educational purposes because the property was used for many fraternal purposes, which included initiations, parties, and other social activities); Kansas Wesleyan Univ. v. Saline County Comm'rs, 120 Kan. 496, 497, 243 Pac. 1055 (1926) (granting an exemption for a university president's residence because official meetings and school gatherings held at the president's residence were part of the process by which the affairs of the institution were administered).
The County points to the general definition for religious activity suggested by this court in Salvation Army v. Board of Johnson County Comm'rs, No. 62,948, unpublished opinion filed August 11, 1989. Acknowledging the tax exemption statute did not specifically define religious purposes, this court suggested the following activities would fall within the scope of the statute:
"'Typical activities of an organization operated for religious purposes would include (a) corporate worship services, including due administration of sacraments and observance of liturgical rituals, as well as a preaching ministry and evangelical outreach to the unch