Request By:
William P. Swain
Boehl, Stopher, Graves & Deindoerfer
One Riverfront Plaza
Louisville, Kentucky 40202
Opinion
Opinion By: Steven L. Beshear, Attorney General; By Alex W. Rose, Assistant Attorney General
Your letter to the Attorney General asks for an opinion as to whether the Southern Baptist Theological Seminary is exempt from the payment of a real estate transfer tax pursuant to Section 170 of the Kentucky Constitution.
It seems self-evident that the Seminary is an institution of education as defined by Section 170. Therefore, the Seminary ". . . shall be exempt from taxation . . ." The problem in this situation arises not as regards the status of the Seminary but as regards to the classification of the tax.
The real estate transfer tax (KRS 142.050(2)) is a tax on the privilege of transferring title to real property. It is, therefore, in the nature of a license tax. In City of Louisville v. Cromwell, 233 Ky. 828, 27 S.W.2d 377 (1930), the Court held that Section 170 applies only to ad valorem taxes and not to license, franchise, occupation or excise taxes.
In OAG 74-897 our office specifically stated that transfers of property by an institution of purely public charity were not exempt from payment of the real estate transfer tax unless specifically exempted by statute. Section 170 did not apply to this tax. This holding would be the same for an institution of education under Section 170.
In Department of Revenue v. Central Medical Laboratory, Inc., Ky. App., 555 S.W.2d 632 (1977), the Court of Appeals held that an institution of purely public charity was exempt from sales and use tax pursuant to the language of KRS 139.470(1). This statute specifically exempted taxpayers from sales and use taxation if they qualified under the State Constitution. No similar statute exists for the real estate transfer tax.
It is, therefore, my conclusion that the Southern Baptist Theological Seminary is not exempt from payment of the real estate transfer tax (KRS 142.050).