Charitable exemption under MCL 211.7o(3); McLaren Reg’l Med Ctr v Owosso (On Remand); “Charity”; Wexford Med Group v Cadillac; Factors used to determine if an organization is a charitable institution; Tax Tribunal (TT)

Holding that petitioner-nonprofit corporation was entitled to a charitable exemption under MCL 211.7o(3), the court affirmed the TT’s grant of summary disposition to petitioner. The case concerned real property owned by petitioner and occupied by a parish of the Roman Catholic Archdiocese of Detroit. The TT “ruled that petitioner was entitled to a so-called ‘pass-through’ exemption under MCL 211.7o(1),” but the court did not reach this issue because it agreed with petitioner’s alternative ground for affirmance, MCL 211.7o(3). It determined the TT “erred in finding that petitioner was not a charitable institution. Application of the Wexford factors requires the conclusion that petitioner qualifies as a charitable institution.” Respondent only disputed the second, third, and fourth Wexford factors. As to the second factor, the court found the evidence, including petitioner’s articles of incorporation, established that it was organized primarily for charity – “for religious purposes and to acquire, own, and lease properties for the benefit of the Archdiocese and its parishes, schools, cemeteries, and other charitable and educational organizations acceptable to petitioner’s sole member, the Archbishop, and listed in The Official Catholic Directory.” Petitioner made its properties available to the Archdiocese free of charge, which “facilitates and essentially funds the charitable activities conducted by the Archdiocese and its parishes.” As to the third factor, petitioner did not discriminate as to “who, among the group it purports to serve, deserves the services.” The court found that limiting “certain services such as weddings to those who express adherence to the Catholic faith is reasonably related to the permissible charitable goal of teaching and spreading” that faith. Finally, the court concluded the fourth factor was satisfied for the same reasons as the second and third. “By providing its properties free of charge to facilitate the teaching and spreading of the Catholic religious faith, petitioner helped to bring people’s hearts or minds under the influence of education or religion.” The court further held that petitioner satisfied McLaren’s other requirements for the MCL 211.7o(3) exemption. Among other things, it was undisputed the Archdiocese, a charitable institution, occupies the property. An ordained priest and two nuns reside there, “and parish employees have a regular physical presence” there.