Pilgrim Pines Seeks Rehearing on Charitable Exemption Denial

WEST SWANZEY, NH (July 26, 2001) - Pilgrim Pines Conference Center is expected to file a motion to rehear within 10 days, following this morning's New Hampshire Supreme Court decision denying the camp a property tax exemption as a charity.

Pilgrim Pines is a year-round center that is part of the East Coast Conference of the Evangelical Covenant Church, which is the plaintiff in the action.

In upholding a Cheshire County Superior Court ruling, the New Hampshire Supreme Court agreed that for the tax years in question (1996-1998), the church "failed to demonstrate that in its operation of Pilgrim Pines, it contributed to the general public benefit, and thus it was not a charitable organization entitled to tax exemption."

Charitable status, under which Pilgrim Pines operates, requires that an organization prove it is obligated to be "a public charity, that is, that the general public, or a substantial portion of it, were the beneficiaries of (its) uses. It cannot be considered a charitable organization if its purposes are confined mostly to benefiting its own members." In its ruling, the Supreme Court stated, "Based upon the factual record, the church failed to prove that the beneficiaries of Pilgrim Pines were a substantial and indefinite segment of the public for the tax years at hand."

The decision, which promises to have a significant impact on any number of organizations operating camps, is the culmination of several years of legal wrangling following the 1996 decision by the Town of Swanzey to tax all of the church's property, except the chapel.

Following an appeal by the church, the town agreed to exempt the preschool, dining, kitchen and administrative facilities, as well as a bathhouse, barn, workshop, meeting hall and chapel. The town also revalued the property at that time, resulting in increased tax bills. The church then filed a petition in Cheshire County Superior Court seeking abatement of all property taxes and a charitable exemption, further requesting a religious exemption in the event charitable status was denied.

The trial court denied charitable status for the conference center, but granted a religious exemption for the chapel and properties related to the chapel. It was at that point the church appealed to the New Hampshire Supreme Court.

The New Hampshire Supreme Court ruling addresses both the charitable and religious exemption issues in the Pilgrim Pines case.

Finding that Pilgrim Pines did not serve a "substantial and indefinite segment of the public," the court said, "We hold that where an organization makes efforts to limit its services, and targets its benefits only to its members, that organization is not obligated to serve an indefinite segment of the population. Accordingly, we affirm the decision of the trial court that the church's operation at Pilgrim Pines is not eligible for a charitable tax exemption."

Turning to the matter of religious exemption, the court stated that in order for property to be exempt under the religious status requirements, "the land must be directly used for religious purposes." The court found that portions of the property qualify for a religious exemption, but found that other portions of the property "were not exempt because they were not specifically adapted to religious uses or purposes, nor was the property so used."

A report from the conference center in April this year stated that the claim for back taxes totals more than $300,000 for years 1996-2000. The amount of back taxes owed for the tax years involved in the appeal total more than $170,000.

For additional information on this case, visit the following links:

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