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Global Capital of World Peace, Inc. v. Wagoner

Supreme Court of West Virginia

November 9, 2017

Global Capital of World Peace, Inc., Petitioner Below, Petitioner
v.
Norma Wagoner, Assessor of Hampshire County, West Virginia and Dale W. Steager, State Tax Commissioner, Respondents Below, Respondents

         Hampshire County 15-AA-1

          MEMORANDUM DECISION

         Petitioner Global Capital of World Peace, Inc., appeals the October 14, 2016, order of the Circuit Court of Hampshire County granting summary judgment to Respondents Norma Wagoner, Assessor of Hampshire County, West Virginia ("Assessor"), and Dale W. Steager, [1]State Tax Commissioner ("Commissioner"). The circuit court upheld both the Assessor's and the Commissioner's denial of an ad valorem property tax exemption to Petitioner for its Hampshire County property. The circuit court reasoned that the property was not being used for charitable purposes within the meaning of West Virginia Code § 11-3-9 (2013). Petitioner argues that it is entitled to the exemption.[2]

         This Court has considered the parties' briefs, oral arguments, and the appendix record on appeal. As explained below, we find no substantial question of law and no prejudicial error. For these reasons, a memorandum decision affirming the circuit court's order is appropriate under Rule 21 of the West Virginia Rules of Appellate Procedure.

         I. Factual and Procedural History

         Petitioner owns 355 contiguous acres in Hampshire County, West Virginia. This property contains improvements, including buildings which house approximately 100 permanent residents (all single males), along with a communal kitchen and dining hall. The residents are not charged for their lodging, but they make donations to Petitioner. The campus has gardens, an extensive trail system, and a forest buffer.

         The property also has buildings for hosting meditation retreat weekends, as well as week-long and ten-day courses on Transcendental Meditation ("TM"). Those classes, seminars and workshops are offered to single men only and are conducted by the Maharishi Purusha Program (the "MPP") for individuals seeking spiritual development and enlightenment through the study and practice of TM. The MPP advertises the classes, accepts applications, screens applicants, and charges a course fee for the participants. In 2014 and 2015, classes ranged from $425 for a two-day weekend class to $1, 900 for the sixteen-day New Year's TM workshop. Only paying customers can attend the TM classes; however, the permanent residents on the property, who are members of the MPP, attend the classes at no charge.

         There is no formal lease agreement between Petitioner and the MPP. However, the MPP makes donations to Petitioner. The MPP reported making grants to Petitioner in the amount of $675, 233 for 2013-2014 fiscal year, and $986, 902 for the 2014-2015 fiscal year on the Internal Revenue Service ("IRS") form 990. No other organizations use this property.

         Both Petitioner and the MPP are exempt from federal income taxes under Section 501(c)(3) of the Internal Revenue Code. Both corporations have the same corporate purpose-to "foster global world peace through the teaching and promotion of TM." Petitioner and the MPP receive tax deductible donations from individuals and organizations, which have enabled Petitioner to expend nearly $4.5 million to improve this parcel of real estate.

         In January 2015, Petitioner's application for exemption of this real property for 2015 ad valorem property tax purposes was denied by the Hampshire County Assessor. Petitioner objected, and requested that the matter be submitted to the Tax Commissioner. The Tax Commissioner also denied the requested exemption in Property Tax Ruling 15-50.

         Petitioner appealed the matter to the circuit court and discovery commenced. When the Commissioner submitted interrogatories to Petitioner, he asked: "What specific charitable purposes have been accomplished due to the meditation conducted on the subject property?" And Petitioner replied that it

has fulfilled educational and scientific purposes by providing, in furtherance of its goals set forth in its Articles of Incorporation, educational and avocational courses in Maharishi Vedic Science and Technology. The course participants enjoyed extended practice of meditation for the purpose of developing greater enlightenment (development of one's full potential), improved health due to release of stress and increased brain wave coherence and greater balance in the physiology, and greater happiness. These same benefits are enjoyed by the permanent residents of the facility.

         On June 15, 2016, the circuit court conducted a hearing on certain pending motions and Petitioner presented a witness, Mr. William Crossing, a resident of the property. Mr. Crossing testified that around 100 men are permanent residents and they are not charged to stay there. Those permanent residents are members of the MPP. During the 2014 calendar year, 154 individuals attended the MPP classes. Mr. Crossing confirmed that the MPP does not serve women. He also testified that individuals must qualify prior to being accepted to attend the MPP classes by taking TM courses, practicing TM for some time, and taking advanced courses. He also testified that Petitioner was "basically just running the facility."

         As there was no genuine issue of material facts, the parties filed motions for summary judgment. The circuit court held a hearing on those motions on October 5, 2016. It granted summary judgment in favor of the Tax Commissioner and held that

[t]he organization does not meet the criteria of "charitable purposes", because the services are not gratuitous and without consideration, benefits are not for an indefinite number of persons, there is no rational basis to exclude women and married men, and the relationship with the MPP is such that the receipts in excess of expenses are, by any other name, held or leased out for profit.

         This appeal followed.

         II. ...


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