Request By:
The National Society of the
Sons of the American Revolution
Honorable Stuart E. Lampe
Wyatt, Grafton & Sloss
2800 Citizens Plaza
Louisville, Kentucky 40202
Opinion
Opinion By: Robert F. Stephens, Attorney General; By: Pat Douglas Davis, Legal Assistant
This is in response to your request of October 11, 1978 for an Opinion relating to the exempt status vel non from real estate ad valorem taxes of The National Society of the Sons of The American Revolution if it exercises its Option to purchase a building from the Grand Lodge of Kentucky Free and Accepted Masons located on the southwest corner of Fourth and Kentucky Streets, Louisville, Kentucky.
You have supplied us with information that demonstrates that the SAR desires to establish its national headquarters in Louisville, Kentucky. It would house its national headquarters in the mentioned building. In the building would be facilities for its Executive Director and members of its staff. A very substantial portion of the building and a substantial amount of the work of the members of the staff would be to maintain a library of some 30,000 volumes. These volumes contain vital records of thousands of American families, records of Revolutionary War soldiers and their burial places and unpublished bible, court and church records. You have informed us that the Library will be kept open to the public, the hours being 9 to 4 Monday through Friday, except for legal holidays.
You have also informed us that the SAR conducts historical oration contests for students across the nation; that it carries on an active program among thousands of children in our country, taking to them an exact replica of the Liberty Bell. Your organization emphasizes patriotism, Americanism and prominent events of the American Revolution. It seeks to cultivate a taste for historic inquiry. Thus, it serves patriotic and educational purposes as well as conducting its public Library.
The pertinent Constitutional provision is § 170 of the Kentucky Constitution. This section provides for exemption from ad valorem taxes on specific types of property.
"There shall be exempt from taxation public property used for public purposes; . . . institutions of purely public charity, and institutions of education not used or employed for gain by any person or corporation, and the income of which is devoted solely to the cause of education, public libraries, their endowments, and the income of such property as is used exclusively for their maintenance; . . ."
Constitution of Kentucky, Section 170.
Several cases provide enlightenment concerning the proper interpretation of this provision. In
Commonwealth, etc. v. Grand Lodge of Kentucky, Ky., 459 S.W.2d 601 (1970), the Court found the administrative headquarters building of the Grand Lodge to be tax exempt. In its Opinion, the Court explained the qualifications for exempt status:
". . . it is sufficient that the ultimate effect of the use of the property is to accomplish the charitable purposes of the institution . . . for a building to be exempt, charity must actually be dispensed there or it must provide 'necessary quarters for an organization whose prime aims and functions are of an actively charitable nature.'"
Grand Lodge, supra at 602.
This case incidentally pertains to the same real estate now under consideration for purchase by the SAR. Thus the exemption of the SAR's use of the building would not result in removing any property from the tax rolls of Jefferson County.
We also note the
Opinion of City of Louisville, et al v. The Filson Club, Ky., 259 S.W.2d 340 (1956). This case provided for an exemption from ad valorem taxes for The Filson Club because it maintained an historical library, and because its purpose was to cultivate a taste for historic inquiry and study among the public and its members.
We have no doubt that the true definition of "charity" is broad enough to encompass the aims and purposes of SAR. A recent case on this specific point is
Banahan v. Presbyterian Housing Corp., et al, Ky., 553 S.W.2d 48 (1977). The Court there said "we feel that charity is broader than relief to the needy poor and includes activities which reasonably better the condition of mankind. " Banahan, supra, at 52. It is without dispute that the purposes of SAR; to foster historical inquiry, patriotism, education, and the maintenance of a public library, are activities that "better the condition of mankind. "
This office has previously published several opinions dealing with the same issue. Relying upon the same cases cited herein, OAG 77-411 concluded that the Big Brothers/Big Sisters of Lexington were institutions of public charity and as such, were exempt from ad valorem taxes.
OAG 73-517 considered the purposes and aims of Actors Theatre of Louisville, and again relying on the same cases, concluded that it was exempt from ad valorem taxes as provided by Section 170 of the Kentucky Constitution.
It is, therefore, our Opinion that, should The National Society of the Sons of The American Revolution exercise its purchase option and locate its national headquarters in Kentucky, its property will be exempt from ad valorem taxes. The aims and objectives of SAR place it precisely within the language of Section 170 of the Kentucky Constitution, which exempts institutions of purely public charities and public libraries.
If we may be of further assistance, please so advise.