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All opinions are subject to modification and technical correction prior to official publication in the North Carolina Reports and North Carolina Court of Appeals Reports. In the event of discrepancies between the electronic version of an opinion and the print version appearing in the North Carolina Reports and North Carolina Court of Appeals Reports, the latest print version is to be considered authoritative.
IN MATTER OF THE APPEAL OF THE MAHARISHI SPIRITUAL CENTER OF AMERICA 639 WHISPERING HILLS ROAD, SUITE 112 BOONE, NORTH CAROLINA 28607
From the listing and taxation of the herein described property by
Watauga County for 1999
Moore & Van Allen, PLLC, by Charles H. Mercer, Jr., John S.
Hughes, and Reed J. Hollander, for taxpayer-appellant.
Parker, Poe, Adams & Bernstein, L.L.P., by Charles C.
Meeker, Jason J. Kaus and Jeffery M. Hedrick, County
Attorney, for Watauga County-appellee.
WYNN, Judge.
The Maharishi Spiritual Center challenges the North Carolina
Tax Commission's finding that pertinent real and personal
property owned by the Spiritual Center is not entitled to an
educational exemption under N.C. Gen. Stat. § 105.278.4. Because
we find that some of the Tax Commission's findings are not
supported by substantial evidence in view of the entire record,
we reverse and remand in part.
The Maharishi Spiritual Center operates as a North Carolina
nonprofit corporation exempt from state corporate income and
franchise tax, sales tax, and federal income tax as a Section
501(c)(3) nonprofit corporation. The articles of incorporation
describe the Spiritual Center's corporate purposes to includeproviding a site for educational programs.
The Spiritual Center's real property consists of 61 parcels
of land, totaling 550 acres in Watauga County. The real property
is divided into two sections: (1) The western campus (men's
campus) is used exclusively by men and contains a meditation
hall, dining hall, a series of residential facilities and
administrative offices; and (2) The eastern compound (women's
campus) is used exclusively by women and also contains a
meditation hall, and dining and residential facilities. In
addition, the Heavenly Mountain Ideal Girls' School is located on
the east campus. Two nonprofit corporations associated with the
Spiritual Center also use the property: Maharishi Vedic
Education Development Corporation, which is a Massachusetts
nonprofit corporation that works with various schools and
universities to develop and offer courses in Vedic education; and
Maharishi Global Administration Through Natural Law, which is a
California nonprofit corporation whose purpose includes promoting
and establishing educational programs in Vedic Science,
technology, and natural law. A for profit residential
development called, Heavenly Mountain Resort, is located between
the western and eastern sections but it is not owned by the
Spiritual Center.
At the men's campus, 310 men participate in the long-term
“Purusha” Program. The program includes a daily meditation
session in the morning from 7:00 to 11:30, which includes
transcendental meditation and advanced meditation programs. After lunch, they engage in fundraising or work for the nonprofit
entities associated with the Spiritual Center; some teach shorter
meditation courses. They gather for group meditation in the
evening, they also attend educational presentations that are in-
person or by videotape. Additionally, students read or study
Vedic literature and have access to a Vedic library; receive
instruction at least monthly from the Maharishi by
teleconference; engage in discussions with professors from the
Maharishi University of Management, a fully accredited
university; receive videotape instructions on Vedic science, a
branch of Indian knowledge with roots in Sanskrit and Eastern
literature; and take classes in Sanskrit and study it on their
own. The Spiritual Center also offers short term courses for
men, which may last a few days to a couple of weeks. These
courses include group practice of meditation along with lectures
from Vedic scholars and scientists.
The programs offered on the women's campus include the
Mother Divine Program, which is administered by the Maharishi
Global Administration Through Natural Law. The educational
program for the women is similar to the men's Purusha program.
The Center also offers shorter women's courses including courses
for degree credit through the Maharishi University of Management
and short term courses in meditation, diet and nutrition, and
mother-daughter topics.
The programs are open to all applicants; and, students are
provided with food, lodging and access to the facilities. Students pay a fixed tuition; however, they are also asked to
raise $1,000 a month in funds to cover their room, board and
costs of maintaining the Center. The Spiritual Center does not
award formal diplomas or degrees.
The Heavenly Mountain Ideal Girls' School located on the
East Campus is a fully accredited North Carolina non-public
school, which is operated by Mother Divine and Maharishi Global
Administration Through Natural Law. The school offers courses in
grades 9 through 12, including, math, science, physical education
and the arts. The school awards high school diplomas and some of
the graduates have attended colleges and universities.
On 22 April 1999, the Watauga County Board of Equalization
and Review denied the Spiritual Center's request for exemption
from property taxes for 61 parcels of real estate and associated
personal property. The Board also denied exemption for the
Heavenly Mountain Ideal Girls' School and undeveloped property
owned by the Spiritual Center. The Spiritual Center appealed to
the Tax Commission. In its final decision, the Tax Commission
made findings of fact and conclusions, and ruled that the
Spiritual Center was not entitled to exemption from property
taxes on educational, charitable or scientific grounds. The
Spiritual Center appealed to this Court.
(b) So far as necessary to the decision and
where presented, the court shall decide all
relevant questions of law, interpret
constitutional and statutory provisions, and
determine the meaning and applicability of
the terms of any Commission action. The court
may affirm or reverse the decision of the
Commission, declare the same null and void,
or remand the case for further proceedings;
or it may reverse or modify the decision if
the substantial rights of the appellants have
been prejudiced because the Commission's
findings, inferences, conclusions or
decisions are:
(1) In violation of constitutional
provisions; or;
(2) In excess of statutory authority or
jurisdiction of the Commission; or
(3) Made upon unlawful proceedings; or
(4) Affected by other errors of law; or
(5) Unsupported by competent, material and
substantial evidence in view of the
entire record as submitted; or
(6) Arbitrary or capricious.
take into account whatever in the record fairly detracts from the weight of the [Tax Commission's] evidence. . . [T]he court may not consider the evidence which in and of itself justifies the [Tax Commission's] decision without [also] taking into account the contradictory evidence or other evidence from which conflicting inferences could be drawn.
In re Moses H. Cone Memorial Hosp., 113 N.C. App. 562, 571, 439 S.E.2d 778, 783 (1994) (citations omitted).
In applying the whole record test, the reviewing court must “take into account both the evidence justifying the agency's decision and the contradictory evidence from which a different result could be reached.” Lackey v. Dept. of Human Resources, 306 N.C. 231, 238, 293 S.E.2d 171, 176 (1982). “Finally, thereviewing court must determine whether the administrative decision had a rational basis in the evidence.” King v. N.C. Envtl Management Comm., 112 N.C. App. 813, 816, 436 S.E.2d 865, 868 (1993).
Moreover, when a statute provides for an exemption from taxation, any ambiguities therein are resolved in favor of taxation. See Aronov v. Secretary of Revenue, 323 N.C. 132, 140, 371 S.E.2d 468, 472 (1988), cert. denied, 489 U.S. 1096 (1989)(holding that statutory exemptions from property taxes are strictly construed against exemption); see also in re Worley, 93 N.C. App. 191, 195, 377 S.E.2d 270, 273 (1989). Furthermore, when a matter comes before the Tax Commission, it is the taxpayer's burden to prove that the property is entitled to an exemption. See In re Southeastern Baptist Theological Seminary, Inc., 135 N.C. App. 247, 249, 520 S.E.2d 302, 304 (1999). This burden “is substantial and often difficult to meet because all property is subject to taxation unless exempted by statute of statewide origin.” Id.
Buildings, the land they actually occupy, and
additional land reasonably necessary for the
convenient use of any such building shall be
exempted from taxation if:
(1) Owned by an educational institution
(including a university, college, school,
seminary, academy, industrial school, public
library, museum, and similar institution);
(2) The owner is not organized or operated
for profit and no officer, shareholder,
member, or employee of the owner or any other
person is entitled to receive pecuniary
profit from the owner's operations except
reasonable compensation for services;
(3) Of a kind commonly employed in the
performance of those activities naturally and
properly incident to the operation of an
educational institution such as the owner;
and
(4) Wholly and exclusively used for
educational purposes by the owner or occupied
gratuitously by another nonprofit educational
institution (as defined herein) and wholly
and exclusively used by the occupant for
nonprofit educational purposes.
The wording and the construction of N.C. Gen. Stat. § 105-
278.4 make it clear that there are four separate and distinct
requirements which the Spiritual Center must meet to qualify for
an educational exemption. See In re Atlantic Coast Conference,
112 N.C. App. at 4, 434 S.E.2d at 867. Initially, we point out
that the second requirement of § 105-278.4 is not disputed by the
Tax Commission or by the County of Watauga _- the Spiritual
Center is not organized for profit; it is in fact, a nonprofit
organization.
Spiritual Center does not have a faculty, nor does it provide a course of study or grant degrees. The Spiritual Center is not accredited as a college or university. Foreign members of the Purusha come to the United States on visitors' visas, not student visas. Members of the Purusha and Mother Divine do not graduate from the Spiritual Center and may stay indefinitely.
“While our courts have consistently held that tax exemption
statutes must be strictly construed against exemption, they have
also held that such statutes should not be given a narrow or
stingy construction.” In re Wake Forest Univ., 51 N.C. App. 516,
521, 277 S.E.2d 91, 94, review denied, 303 N.C. 544, 281 S.E.2d
391 (1981); see also Southminster, Inc. v. Justus, 119 N.C. App.
669, 674, 459 S.E.2d 793, 796 (1995). N.C. Gen. Stat. § 105-
278.4 does not require in the plain language of the statute that
to be classified as an education institution, an organization
must meet certain formalities such as a degree or certification,
or accreditation.
The Spiritual Center argues that it is the record owner of
the property and its articles of incorporation describe the
corporate purpose to include providing a site for educational
programs. The articles of incorporation for the Spiritual Centerstate that
[t]he corporation is organized exclusively
for charitable, religious, educational, and
scientific purposes . . . and, specifically
to, create a home for world peace
professionals practicing the Transcendental
Meditation and Transcendental Meditation
Sidhi Programs to help create world peace and
harmony in the United States and the world
and to create and offer to the public, and
those living in the community, education
programs in developing higher states of
consciousness through Maharishi's Vedic
Science.
(emphasis added).
Stephen Souza, vice president of the Spiritual Center,
testified at the hearing before the Tax Commission that the
Spiritual Center teaches transcendental meditation, advanced
meditation such as TM-Sidhi and other courses. Also, at the
hearing, several experts testified that the Spiritual Center was
an educational institution. Dr. Maya McNeilly, a psychologist,
who is an adjunct professor at Duke University Medical Center,
testified that Duke University is not unique in giving college
credit for courses where people are spending their time
meditating. She pointed out that “other universities such as
University of Massachusetts at Amherst . . . UNC does, University
of Arizona does, Harvard does, I believe Stanford does, and UCLA
might. And there are probably others that I'm just not aware
of.”
Dr. Dale T. Snauert, a professor in the Department of
Education Studies at Adelphi University testified that the
Spiritual Center is similar to a university, college, school orseminary.
The Spiritual Center, has from my reading of
it, a defined set of purposes, which are
education. They have education goals and
those goals . . . the fulfillment of those
goals are the reason of existence for the
Spiritual Center, just as the reason a
university, college, school would have
specialized, formalize, public goals and
objective. . . The Spiritual Center has a
curriculum as far as I can tell. It has an
administrative structure. It has a governing
body, a board of trustees, I believe. It has
facilities that are devoted to the
fulfillment of the educational purposes. It
engages in various pedagogical practices,
seminars, teaching functions of various
kinds. So, . . . the Spiritual Center meets
the criteria of my definition of an
educational institution.
We hold that even construed strictly the term educational
institution easily accommodates the nature of the Spiritual
Center's organization. Accordingly, we hold that the Tax
Commission erred in concluding that the Spiritual Center was not
a educational institution.
In its findings of fact supporting this conclusion, the Tax Commission stated that “the property under appeal consists of 61parcels of real property and associated personal property in numerous structures, including meditation, dining, residential and office facilities.” However, the Tax Commission presented no contrary evidence and we find no evidence in the record to show that the Spiritual Center's facilities are not the kind commonly employed by educational institutions.
Indeed, the record on appeal shows that other universities, such as Duke University, set aside places for people to meditate. Dr. McNeilly testified that “appropriate space needs to be identified that will facilitate and support the learning and the transmission of knowledge and then the practicing of skills. The actual meditating is part of the education.” Dr. McNeilly also testified at the hearing that
Everything that I have seen, heard and read is very consistent with what happens in other academic institutions where meditation is taught, academic institutions meaning universities like Duke, like UNC, like actually most medical centers -- Harvard, Stanford, University of Arizona and so on-- that's what's happening there is . . . a curriculum and there are objectives -- educational objective that are clearly delineated and that are practiced along the lines of developing skills to then accomplish those objectives.
In light of this evidence, we hold that a review of the
whole record fails to show substantial evidence supporting the
Tax Commission's determination that the Spiritual Center did not
meet the third requirement of § 105-278.4.
In support of this conclusion, the Tax Commission found that:
2. As of the tax valuation date January 1, 1999, the western compound was occupied and used by over 300 single men who compose a group that the Spiritual Center calls the Purusha. The members of the Purusha meditate eight hours a day, from 7:00 a.m. to 11:45 a.m. and from 4:30 p.m. to 7:45 p.m. Purusha members meditate as a group in a large meditation hall. On the Spiritual Center's premises in the afternoons, the Purusha also telephone their sponsors for contributions and undertake personal business and/or administrative office work. This group meditation occurs each day of the year, and many of the Purusha have been members since the group formed 20 years ago.
3. Members of the Purusha also attend an
evening program from 8:30 p.m. to 9:15 p.m.
This time is for, among other matters,
viewing video tapes, teleconferencing with
Maharishi Yogi who resides in Holland, and
discussing matters concerning meditation.
4. Single women occupy and use the eastern
compound. The women reside in two to four
room residential suites. A group of over 100
women are members of what is called the
Mother Divine as of January 1, 1999. The
Mother Divine engage in the daily practice of
group meditation similar in duration to the
Purusha. Individuals remain members of the
Mother Divine for years.
5. The Purusha and Mother Divine are
experienced practitioners of Transcendental
Meditation an TM-Sidhi programs. The TM-Sidhi is and advanced meditation program. In
the United States individuals may take a
course to learn the Transcendental
Meditation technique for a fee. The content
of this is confidential, and individuals who
take this course agree not to disclose its
contents. The Transcendental Meditation is
trademarked and is learned in a seven-step
procedure occurring over seven days. At the
end of those steps, the individuals attending
the course have learned to meditate as
efficiently and correctly as someone who has
been practicing for 20 years.
6. During the extended daily periods of
group meditation, the Purusha and Mother
Divine focus on a Mantra, which is a sound
that has no meaning. In focusing on the
mantra, the meditator's mind becomes “settled
down” and is not contemplative. The
meditator's bodies are at rest, usually with
their eyes closed. The surroundings in the
Spiritual Center's meditation facilities are
quiet during group meditation.
7. No information is transmitted to the
Purusha and Mother Divine during their group
practice; training or development of
knowledge or skills is not the primary
activity because the Purusha and Mother
Divine are already experienced in meditation.
8. After meditating, members of the Purusha
and Mother Divine from time to time make
notes of their experience and compare their
experiences with those of others by reading
ancient literature.
N.C. Gen. Stat. § 105-278.4(f) (2001) defines an
“educational purpose” as
one that has as its objective the education
or instruction of human beings; it
comprehends the transmission of information
and the training or development of the
knowledge or skills of individual persons.
The operation of a golf course, a tennis
court, a sports arena, a similar sport
property, or a similar recreational sportproperty for the use of students or faculty
is also an educational purpose, regardless of
the extent to which the property is also
available to and patronized by the general
public.
The County of Watauga and the dissent rely on our Court's
holding in the Matter of the Appeal of Chapel Hill Day Care
Center, Incorporated, 144 N.C. App. 649, 551 S.E.2d 172 (2001),
as authority for the position that the Spiritual Center is not
entitled to an exemption under N.C. Gen. Stat. § 105-278.4. In
Chapel Hill Day Care Center, we held that the child care center
was custodial rather than educational and therefore not eligible
for a property tax exemption for educational institutions. Our
Court pointed out that “[t]here was ample evidence in the record
from which the Tax Commission could conclude that the [day care
center] is not a traditional school and is not [w]holly and
exclusively used for educational purposes.” Id. at 658, 551
S.E.2d at 178.
We find the present case readily distinguishable and not
analogous to Chapel Hill Day Care Center. In this case, the
Spiritual Center is a residential center, which offers training
to adults in meditation in short and long term courses. Unlike
the child care center in Chapel Hill Day Care Center, the
Spiritual Center is not a custodial program but is a facility
that offers training by self-study, lecture and practical
experience. Moreover, the record shows substantial evidence that
the training or development of skills of individuals occurs at
the Spiritual Center. The Spiritual Center providesinstructional sessions and teleconferences on Vedic Sciences, and
meditation teachers instruct on Sanskrit and Vedic Sciences.
Thus, we find that Chapel Hill Day Care Center does not control
here.
Moreover, the dissent's comparison to In re North Carolina
Forestry Foundation, Incorporated, 296 N.C. 330, 250 S.E.2d 236
(1979), fails to note the obvious difference, between a nonprofit
foundation's forest property being primarily used as a commercial
property by a paper company in which the paper company was given
operational control over the forest, and the case at bar, where
nonprofit organizations, that work with various schools and
universities, run educational programs for men, women, and young
girls. Thus, applying the whole record test, we find substantial
evidence in the present case showing the use of the Spiritual
Center's property as educational. The record indicates that the
Spiritual Center offers a variety of courses in short-term and
long-term meditation, Vedic Science and Sanskrit through live and
videotape formats. The meditation sessions involve specific
instructions from teachers. Basic transcendental meditation may
be learned in seven days, however increased study leads to better
proficiency. Dr. McNeilly, who teaches meditation courses at
Duke University, testified as an expert at the hearing that the
Spiritual Center is “an academic institution that continues to
train and educate people who are learning.”
The record also indicates that participants practice
meditation techniques, review their techniques in light of VedicScience, discuss their progress with instructors and study
Sanskrit. Dr. McNeilly explained, at the hearing that learning
meditation is no different than learning
medicine or psychology or, to my knowledge,
law, taxes. At the beginning stages, you
spend a good bit of time perhaps with an
instructor, with a professor. They talk to
you, they lecture, you attend lectures. You
might see videotapes, you might engage in
discussions, study sections and so on . . .
but as time progresses that contact
diminishes and progressively diminishes the
more advanced you get in the discipline.
She described how meditation classes are taught at Duke
University, “[w]e give the student less and less guidance, if you
will, because then the focus of the education turns to them
learning on their own by doing it.”
Dr. David Orme-Johnson, a psychologist, past chairman of the
Department of Psychology at the Maharishi University of
Management, testified that transcendental meditation and Vedic
science and technology arise out of the Indian Eastern tradition
that is
an oral tradition and it's learned on a one-
on-one basis between teacher and student.
And the reason for that is because
everybody's experience is different, and
. . . the teacher imparts some information
and the student practices that and then gives
feedback on what happened . . . it's a
personal learning process that's tailored to
that individual's particular responses to the
instruction, and that's why it has to be one-
to-one basis and not put in a book.
Dr. Orme further testified that participants are learning while
meditating “because they are developing deeper experiences oftheir own consciousness and fabrics of their consciousness.” The
basic part is “while they are meditating, having the experience,
and then comparing it with the literature is the second part --
second phase of it.” Dr. Orme also testified that based on his
professional knowledge of education and based on his knowledge of
the Spiritual Center that the Purusha and Mother Divine program
and the Ideal Girls School were involved in educational
activities. He also opined that there was a transmission of
information taking place at all of the programs.
In addition, at the hearing, Dr. Verne Bacharach, a
professor of psychology, who testified for the County, stated
under cross-examination that transcendental meditation was an
educational experience. He also acknowledged that during his
deposition testimony that he had no opinion about whether the
transmission of information or knowledge about transcendental
meditation techniques results in the knowledge or skills of
individual persons or is educational.
Accordingly, in applying the whole record test, we find that
the evidence does not support the Tax Commission findings and
conclusions of law. To the contrary, the record shows
substantial evidence that the Spiritual Center met the four
separate and distinct requirements in order to qualify for an
educational exemption under N.C. Gen. Stat. § 105-278.4.
Finally, we conclude that the Spiritual Center is entitled to an educational exemption for the property used by the Ideal Girls School. N.C. Gen. Stat. § 105-278.4(c) provides in pertinent part:
Notwithstanding the exclusive-use requirements of subsections (a) and (b), above, if part of a property that otherwise meets the requirements of one of those subsections is used for a purpose that would require exemption if the entire property were so used, the valuation of the part so used shall be exempted from taxation.
The statute expressly provides for partial exemption where a
discrete part of a larger property is used for tax exempt
purposes. The record shows that Maharishi Global Administration
Through Natural Law, which operates the school is a California
nonprofit corporation whose purpose includes promoting Vedic
Science and technology, and natural law, and establishing
educational programs. Moreover, there was testimony at the hearing that the
Maharishi Global Administration Through Natural Law has been
teaching transcendental meditation and related programs for the
past 41 years. It was also clear from the record that the
Heavenly Mountain Ideal Girls' School is an educational
institution that is being used for educational purposes. The
courses offered by the school, for grades 9 through 12, include
math, science, physical education and the arts. The Girls'
School is in full compliance with state law relating to private
schools, and parents who send their children to the school are
deemed to have met the state's requirements for compulsory
education. Moreover, the school grants high school diplomas, and
graduates have attended Wellesley and Colorado Colleges, and
other post-secondary institutions.
In sum, we reverse the Tax Commission's determination that
the subject developed property and the Heavenly Mountain Ideal
Girls' School is not entitled to the educational exemption
authorized by N.C. Gen. Stat. § 105-278.4. We further remand to
determine whether the undeveloped property of the Spiritual
Center is “reasonably necessary” for the use of the exempted
property and therefore should likewise be exempted.
Reversed in part; remanded in part.
Judge HUDSON concurs.
Judge TYSON dissents.
TYSON, Judge, dissenting. The majority did not properly apply the standards for
judicial review of decisions of the North Carolina Property Tax
Commission (“Commission”) and has ignored the burden imposed on
the taxpayer by N.C. Gen. Stat. § 105-282.1. Accordingly, I
respectfully dissent.
The Spiritual Center contends and the majority finds that
the Commission's findings and conclusions are unsupported by
competent, material and substantial evidence. This standard of
review is known as the “whole record” test. N.C. Gen. Stat. §
105-345.2(5) (2001). The whole record test is not “a tool of
judicial intrusion.” Rainbow Springs Partnership v. County of
Macon, 79 N.C. App. 335, 341, 339 S.E.2d 681, 685 (1986) (quoting
In re Rogers, 297 N.C. 48, 65, 253 S.E.2d 912, 922 (1979)). This
test does not allow a reviewing court to substitute its own
judgment in place of the Commission's judgment even when there
are two reasonably conflicting views. Id. at 341, 339 S.E.2d at
684. The whole record test merely allows a reviewing court to
determine whether the decision of the Commission is supported by
substantial evidence. Id. at 341, 339 S.E.2d at 685.
“'Substantial evidence is such relevant evidence that a
reasonable mind might accept as adequate to support a
conclusion.'” Id. (quoting Thompson v. Wake County Board of
Education, 292 N.C. 406, 414, 233 S.E.2d 538, 544 (1977)). “The
credibility of the witnesses and resolution of conflicting
testimony is a matter for the administrative agency to
determine.” In re Appeal of General Tire, Inc., 102 N.C. App.
38, 40, 401 S.E.2d 391, 393 (1991) (citing Commissioner of
Insurance v. Rate Bureau, 300 N.C. 381, 406, 269 S.E.2d 547, 565,
reh'g denied, 301 N.C. 107, 273 S.E.2d 300-01 (1980)). This
Court cannot overturn the Commission's decision if supported by
substantial evidence. Rainbow Springs, 79 N.C. App. at 343, 339
S.E.2d at 686.
The Spiritual Center argues that it is entitled to an
educational exemption. The statute sets forth four separate and
distinct requirements which a taxpayer must prove to qualify for
an education exemption from taxation:
(1) Owned by an educational institution
(including a university, college, school,
seminary, academy, industrial school, public
library, museum, and similar institution);
(2) The owner is not organized or operated
for profit and no officer, shareholder,
member, or employee of the owner or any other
person is entitled to receive pecuniary
profit from the owner's operations except
reasonable compensation for services;
(3) Of a kind commonly employed in the
performance of those activities naturally and
properly incident to the operation of aneducational institution such as the owner;
and
(4) Wholly and exclusively used for
educational purposes by the owner or occupied
gratuitously by another nonprofit educational
institution (as defined herein) and wholly
and exclusively used by the occupant for
nonprofit educational purposes.
N.C. Gen. Stat. § 105-278.4(a) (2001). The majority opinion
correctly states that the taxpayer seeking exemption from
property taxes has the burden of establishing entitlement to such
an exemption. N.C. Gen. Stat. § 105-282.1(a) (2001).
The majority's opinion focuses on the expert testimony presented by the Spiritual Center and holds that this testimony was substantial evidence that the Spiritual Center met the fourth requirement to qualify for an exemption for educational purposes under N.C.G.S. § 105-278.4. Presuming this testimony is substantial evidence, the majority misapplies our standard of review. Such evidence would not warrant reversal of the Commission if there is any evidence of substance which tends to support the Commission's findings and conclusions. This Court is bound by such evidence, even though there is evidence that would have supported a finding to the contrary. See In re Appeal ofPerry-Griffin Found., 108 N.C. App. 383, 393, 424 S.E.2d 212, 218 (1993) (this Court is not permitted to replace the Commission's judgment with its own judgment even when there are two reasonably conflicting views).
In this case, the Commission received conflicting expert testimony regarding whether the practice of meditation eight hours a day by the Purusha and Mother Divine is an educational activity and whether the Spiritual Center is an educational institution. Dr. Orme-Johnson, a psychologist, testified that participants in meditation are learning. Dr. McNeilly, a professor of psychology, testified that the Spiritual Center is “an academic institution.” On the other hand, Dr. Bacharach, a professor of psychology and qualified as an expert witness for Watagua County, testified that the Spiritual Center is not an educational institution and that while the teaching of the TM technique of meditation over a seven-day period is an educational or learning activity, the practice of meditation eight hours a day would not be a learning activity. The Commission weighed the credibility of the witnesses, accepted the testimony of Dr. Bacharach and necessarily rejected the testimony of the other experts. The testimony of Dr. Bacharach was sufficient to support the Commission's finding and conclusion that the Spiritual Center's facilities are not “wholly and exclusively” used for educational purposes.
The granting of exemption from taxation to some necessarily increases the tax burden on others. See In re Appeal of Worley,93 N.C. App. 191, 195, 377 S.E.2d 270, 273 (1989). Accordingly, “[s]tatutes exempting specific property from taxation because of the purposes for which [the] property is held and used . . . should be construed strictly . . . against exemption and in favor of taxation.” Id. (quoting Harrison v. Guilford County, 218 N.C. 718, 721, 12 S.E.2d 269, 272 (1940)). This does not mean that exemption statutes should be construed narrowly or stingingly, but simply means that “everything [should] be excluded from [the statute's] operation which does not clearly come within the scope of the language used . . . .” Id. (citation omitted).
The plain language of N.C.G.S. § 105-278.4(a)(4) states “[w]holly and exclusively used for educational purposes by the owner . . . .” (Emphasis supplied). Merely providing some short and long-term meditation courses, as well as Vedic Science and Sanskrit courses, does not qualify the Spiritual Center for exemption. Mr. Souza, a member of the Purusha and vice-president of the Spiritual Center, testified that: (1) the purposes identified in the Articles of Incorporation were to create a home for the world peace professionals or Purusha and Mother Divine members, to help create world peace and harmony through the Maharishi Effect, and to create and offer to the public, educational programs in developing higher states of consciousness, (2) 1,000 Purusha members is their goal because ancient texts suggest that this will have a profound effect on the environment through the Maharishi Effect, and (3) part of the purpose and current use of the meditation halls within theSpiritual Center is to create an “air of tranquility” or Maharishi Effect by having hundreds of experts in Maharishi's advanced Transcendental Meditation Sidhi program meditate as an amenity for the development of Heavenly Mountain Resort, which is situated between the two meditation halls. Thus, while the Spiritual Center does offer some educational activity that is not its primary purpose. The record clearly establishes that the primary purpose of the Spiritual Center is the practice of meditation by Purusha and Mother Divine members, many of which have been a part of their group for twenty years. See In re Appeal of North Carolina Forestry Found., Inc., 296 N.C. 330, 250 S.E.2d 236 (1979) (nonprofit foundation owned a forest for the purposes of promoting improved forestry methods, forestry research, and education, but exclusive use element was not met because a paper company actually occupied and used the forest for commercial purposes, making the educational use merely incidental); see also In re Appeal of Chapel Hill Day Care Center, Inc., 144 N.C. App. 649, 551 S.E.2d 172 (2001) (while some of the daycare's activities served to educate children enrolled, this was not enough to trigger tax exempt status under N.C.G.S. § 105-278.4 which requires an institution to have a “[w]holly and exclusively” educational purpose); In re Appeal of Atlantic Coast Conference, 112 N.C. App. 1, 434 S.E.2d 865 (1993) (athletic activities are a natural part of the education process and the role of the ACC is to promote college athletics).
N.C. Gen. Stat. § 105-278.4(a)(1) requires that the property be “[o]wned by an educational institution (including a university, college, school, seminary, academy, industrial school, public library, museum, and similar institution).” I interpret the general phrase “educational institution” in relation to the express terms which follow it according to the dictates of ejusdem generis, a well established rule of statutory construction providing that “'where general words follow a designation of particular subjects or things, the meaning of the general words will ordinarily be presumed to be, and construed as, restricted by the particular designations and as including only things of the same kind, character and nature as those specifically enumerated.'” State v. Lee, 277 N.C. 242, 244, 176 S.E.2d 772, 774 (1970) (citations omitted); see also State v. Craig, 176 N.C. 740, 744, 97 S.E. 400, 401 (1918) (“when particular and specific words or acts, the subject of a statute, are followed by general words, the latter must, as a rule be confined to acts and things of the same kind”).
Here, the terms immediately following the phrase “educational institution” are usually, if not exclusively, aimed at education. The Ideal Girls' School is owned and operated byMaharishi Global Administration Through Natural Law (“MGANL”). Mr. Souza testified that the Restated Articles of Incorporation for MGANL state that the first purpose of the corporation is “to promote throughout the world knowledge that life is the ever- evolving expression of Natural Law;” the second purpose listed is “to bring an end to all problems and suffering throughout the world through Maharishi Vedi Science and Technology;” the third purpose is “to work closely with other organizations dedicated to the advancement of the Maharishi Sthapatya Veda to create ideal housing;” the fourth purpose listed is “to establish facilities to introduce programs of Natural Law to everyone through education, health, economy, administration; the fifth purpose is to accept, hold, invest, reinvest, administer any gifts, legacies, etc.;” and the sixth purpose listed is “to perform any and all lawful acts.” As with the Spiritual Center, the primary aim of MGANL is not education. In accordance with the dictates of ejusdem generis, I would conclude that the Ideal Girls' School does not fall within the scope of “educational institution” as that phrase is used in N.C.G.S. § 105-278.4(a)(1).
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