A central Ohio nonprofit radio station that plays contemporary Christian music and uses space on its premises for church services qualifies for a real property tax exemption, the Ohio Supreme Court ruled today.

In a 4-3 decision, the Supreme Court found that to qualify under the state law allowing for an exemption for a “house of worship,” the real property must be used primarily for a religious purpose and is not for profit. The decision reverses rulings by the Ohio tax commissioner and the Board of Tax Appeals (BTA) rejecting an exemption for the 2.2 acre-facility in Gahanna.

Writing for the majority, Justice Sharon L. Kennedy wrote that Christian Voice of Central Ohio has dedicated all its land and buildings to charity and religion and has all the necessary attributes of a church.

In a dissenting opinion, Chief Justice Maureen O’Connor asserted the majority announced a “new and overly broad interpretation of the exemption” that allows a station that sells millions of dollars in advertising to earn the tax break.

Exemption for New Location Denied
Christian Voice originally operated the station from offices located in New Albany. In 1991, the tax commissioner granted the station an exemption under R.C. 5709.07(A)(2), the public-worship exemption, determining the property was “used for church purposes.”

In 2008, Christian Voice relocated its offices to Gahanna and applied for the same exemption that its New Albany property had enjoyed for 17 years. In 2011, the tax commissioner denied the exemption, finding “no evidence that people assemble to worship together on the subject property” and reasoning that the exemption applies only “where people gather to profess their faith or to observe and participate in religious rituals or ceremonies.”

In 2013, the tax commissioner denied a 2007 challenge by the local school district to the continued public-worship exemption for the New Albany property. It reasoned that the property was “being used for church facilities.”

The Ohio Board of Tax Appeals affirmed the tax commissioner’s decision to deny the exemption for the Gahanna property, and Christian Voice appealed to the Supreme Court. Because the appeal was made from the BTA, an administrative agency, the Court had to accept it for review.

Station Dedicated to Religion and Charity
Christian Voice operates three radio stations, with WCVO 104.9 “The River” being the most prominent. Christian Voice is a nonprofit organization established in 1964, and according to the station, it produces radio programming for “furthering the gospel of Jesus Christ through Contemporary Christian Music and Preaching and Teaching radio programs.”

Along with a radio tower, the property has a two-story building with station offices along with a chapel and a basement with a meeting room. The station broadcasts are 95 percent music supported by advertising, which by federal law can mention the business name and telephone number, but not the price of products or services. Christian Voice stated its revenues are primarily from the advertising underwriters and donations. Along with the music, the station employs a full-time pastor who records a one-minute devotional that is played throughout the day, and the on-air staff relay religious messages when speaking between songs.  The pastor’s counseling services are promoted on the air. On Sunday mornings, a three-hour syndicated program called “Keep the Faith” is aired.

The pastor leads a prayer devotional with staff in the chapel four times a week to pray for the intentions of listeners. He also holds a bible study once a week. Outside organizations used the church facilities without charge on a regular occasion with some making donations for use of the property. The station is active in community outreach.

Property’s Use Determines Taxation
Justice Kennedy noted the exemption in R.C. 5709.07(A)(2) is granted to “houses of worship used exclusively for public worship” along with the books, furniture, and grounds that are not used with a view to profit and are “necessary for their proper occupancy, use, and enjoyment.” She explained the Court in prior rulings has defined “public worship” as “the open and free celebration or observance of rites and ordinances of a religious organization.” In determining whether the property in question qualifies for the public–worship exemption, Justice Kennedy applied the Court’s previous holding that the real property must be used in a “principal, primary, and essential way to facilitate public worship.” Justice Kennedy wrote that this was the interpretation applied by the Court, the tax commissioner, and the BTA for almost 30 years, and that the Court had not limited the application of this holding to “auxiliary buildings or portions of buildings …when there existed a primary building used exclusively for public worship.”

Justice Kennedy wrote that resolution of this issue was guided by the Court’s 1972 decision in Maumee Valley Broadcasting Assn. v. Porterfield. In that case the nonprofit association operating a broadcasting studio and a 120-person auditorium qualified for sales and use tax exemptions because the Court indicated the tax commissioner should take a holistic view of the operation and not separate the radio station from the rest of the property. In so doing, the Court found that the evidence demonstrated that the association exhibited the necessary attributes of a church.

Justice Kennedy reasoned that “as a church is but one type of house of public worship,” to determine whether Christian Voice qualifies for the exemption in R.C. 5709.07(A)(2), it is necessary to consider the statutory definition of “church” set forth in R.C. 5709.02(D)(1) and the related case law. Justice Kennedy wrote that the evidence demonstrates that Christian Voice “has dedicated all its land and buildings to charity and religion, and … [has] the necessary attributes of a church.”

“The fact that Christian music makes up the majority of the broadcasting strengthens, not weakens, Christian Voice’s arguments that its purpose is religious,” she wrote.

She concluded that as the record clearly demonstrates that the primary use of the Christian Voice’s land and building is for church purposes, it uses its property “exclusively for public worship.”

Justice Kennedy also rejected the BTA’s argument that the sale of commercial advertising is not public worship, because the state law does not ban the sale of advertising when it is not to earn a profit. She noted the advertising sales were done to continue Christian Voice’s ministry, which is part of the organization’s religious mission and not to generate any profit.

“In this respect, Christian Voice is no different from a church that sells advertising on weekly bulletins or on banners at church functions to raise revenue that allows the church to continue its religious ministry,” she wrote.

Justice Kennedy noted that the cases relied upon by Chief Justice O’Connor to argue that “it is the use of the property and not the use of the proceeds derived therefrom that determines whether a tax exemption is conferred” did not involve the public-worship exemption under R.C. 5709.07(A)(2). Instead, the exemption at issue in those cases was the charitable-use exemption under R.C. 5709.12. Justice Kennedy asserted that the dissent’ attempt to extrapolate this rule into the public-worship exemption lacked support in the Court’s case law.

The dissenting justices maintained the rule in Ohio is that if the property is used to generate revenues, it does not qualify for a tax exemption even if the proceeds go for nonprofit uses. Justice Kennedy explained that rule has been raised in the case where a charitable exemption has been sought, and she noted there has been no Ohio cases where that rule has been applied to a house of worship property tax exemption request.

Justices Paul E. Pfeifer, Terrence O’Donnell, and Judith L. French joined the opinion.

Dissent Finds Property Is Just Radio Station
In her dissent, Chief Justice O’Connor accused the majority of “blatant activism” for it use of irrelevant case law “flown in on a wing and prayer” to resolve the case in favor of Christian Voice.

Chief Justice O’Connor noted the station derives more than $2 million in advertising revenue a year and rents space on its broadcasting tower. She noted a small percentage of the physical space – about 2 percent of the building – is comprised of the chapel, and no groups were reported to use the chapel regularly for religious purposes.  

She maintained that songs described as “bible verse set to music” and delivered to listeners in their homes, vehicles, and workplaces do not transform those locations into houses of worship. She also asserted that music inspired by the biblical passages is not unique to the station’s format and she pointed to examples of Handel’s “Messiah” and Pete Seeger’s “Turn! Turn! Turn!”made famous by The Byrds in the 1960s.

Chief Justice O’Connor maintained the Maumee Valley decision does not apply in this case for a number of reasons, including that the case involved sales and use taxes, not property taxes, and that it was a nondenominational church claiming a tax exemption on the same grounds as a more traditional house of worship. In 1972, a nondenominational church was uncommon, and the organization was arguing that because it also had a radio station it should not be treated differently than a traditional single denominational church.

She wrote the significant differences between the organization in Maumee Valley and Christian Voice are the Maumee Valley group relied on donations, gifts, and contributions and conducted church services on the premises that were broadcast. Christian Voice does not broadcast religious services, and that the station simply runs one 60-second devotional “spot” cyclically throughout the day.

“With millions in advertising revenue that it secures (Christian Voice) is, of course, quite different from the organization in Maumee Valley and quite different from the many traditional churches that receive modest revenue from advertising in their weekly bulletins or on banners and church functions,” she wrote.

She also noted that even if the General Assembly has expanded the meaning of “house of worship” to mean more than physical structures, the Christian Voice property was not being used “exclusively” for public worship, which is required to earn the tax exemption.

Justices Judith Ann Lanzinger joined the chief justice’s opinion.

Justice Lanzinger also wrote a separate dissent focusing on the statute’s use of the word “exclusive.” Justice Lanzinger noted the majority interprets the word to mean “primarily,” but she wrote that in past cases, to qualify for an exemption a property had to be used exclusively for worship, but other property such as a building that housed the heating system for a church was also exempted because its primary use was to support the church building.

“Never before have we expanded the exemption, which again must be strictly construed, to property like the one in the present case – a radio station, which is so clearly unlike the traditional church buildings used for public worship to which we have applied the exemption in the past,” she wrote. “There is no church here.”

Justice William O’Neill joined Justice Lanzinger’s dissent.

2014-1626. Christian Voice of Cent. Ohio v. Testa, Slip Opinion No. 2016-Ohio-1527.

View oral argument video of this case.

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