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City of Lewiston v. Salvation Army
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MAINE SUPREME JUDICIAL COURT					Reporter of Decisions
Decision:	1998 ME 98
Docket: 	And-97-710
Argued:	April 9, 1998
Decided:	May 4, 1998

Panel:		WATHEN, C.J., and  CLIFFORD, RUDMAN, LIPEZ, and  SAUFLEY, JJ.


CITY OF LEWISTON v. THE SALVATION ARMY
RUDMAN, J.

	[¶1]  The City of Lewiston appeals from the judgment entered in the
Superior Court (Androscoggin County, Perkins, A.R.J.) affirming a decision of
the State Board of Property Tax Review.  The City asserts that the Board
erred by concluding that The Salvation Army's activities at its Lewiston thrift
store qualified the property for tax exemption.  We disagree and affirm the
judgment.
	[¶2]  The Salvation Army applied to the City of Lewiston for an
abatement of property taxes contending that its property was exempt from
such taxes pursuant to the provisions of 36 M.R.S.A. § 652 (1990 & Supp.
1997).{1}  The City subsequently denied the abatement request and The
Salvation Army appealed the City's decision to the State Board of Property
Tax Review.  Following a hearing, the Board determined that the real
property occupied by The Salvation Army's thrift store qualified for a
property tax exemption.  The City appealed to the Superior Court, which
affirmed the decision of the State Board of Property Tax Appeal.  This appeal
followed.
	[¶3]  The Salvation Army is a charitable organization that operates
adult rehabilitation centers in a number of states, including Maine.  The
rehabilitation centers are funded, in part, by the proceeds generated from
the sale of donated items at thrift stores operated by The Salvation Army. 
One such thrift store, the subject of this appeal, is located on Main Street in
Lewiston.  The Salvation Army acquired the Lewiston property in 1989.  All
revenues from the Lewiston thrift store benefit The Salvation Army's
rehabilitation center in Portland.
	[¶4]  The Board found "that the Lewiston thrift store owned by the
Salvation Army is occupied and used solely for its own charitable purposes. 
Specifically the use of the subject property involves the Salvation Army's
clients with processing and transporting of its donated clothing as a part of
its overall rehabilitation program.  In addition, all goods are priced at a level
consistent with the needs of the low income community which the Salvation
Army is committed to assisting."  The Board specifically noted that "[t]he
stores and the rehabilitation center are interdependent and it is probable
that neither would survive without the other."  The record before the Board
supports the Board's conclusions.  Those items sold at the Lewiston thrift
store are exclusively donated items and are sold at below-market prices. 
The items sold at the Lewiston thrift store are typically processed by
participants in The Salvation Army's rehabilitation program in Portland;
these program participants sort, price, clean, repair, and transport the
donated items for sale.  The Salvation Army's processing of goods for sale at
its Lewiston thrift store constitutes a component of its rehabilitation
regimen it terms "work therapy"  -- a major part of its effort to prepare
participants of their rehabilitation program to become productive members
of society.  No officer or employee of the thrift store derives a percentage of
the store's revenues (about $50,000 per month).  Employees at the thrift
stores earn approximately $200 to $250 per week.
	[¶5]  When "the Superior Court acts in its appellate capacity, we
review directly the decision of the Board for abuse of its discretion, error of
law or findings unsupported by substantial evidence in the record."  IBM
Credit Corp. v. City of Bath, 665 A.2d 663, 664 (Me. 1995) (citations
omitted).  The factual findings of the Board stand "unless the findings are
clearly erroneous because they are not supported by competent evidence in
the record."  Town of Poland v. Poland Spring Health Inst., 649 A.2d 1098,
1100 (Me. 1994).
	[¶6]  The City argues that The Salvation Army's use of its property
does not entitle it to a property tax exemption.  It contends that The
Salvation Army does not use the property occupied by the thrift store solely
for its charitable purposes as required for tax exemption, but rather uses the
property to generate revenue.  The City relies heavily on our decision in City
of Lewiston v. Marcotte Congregate Hous., Inc., 673 A.2d 209 (Me. 1996) to
support its argument that the ultimate use of the profits from the thrift
store in Lewiston for charitable purposes in Portland does not qualify the
thrift store property for tax exemption.  The City misreads Marcotte. 
Section 652(1)(A) exempts from taxation real property that is "owned and
occupied or used solely for their own purposes by benevolent and charitable
institutions . . ."  36 M.R.S.A. § 652(1)(A) (emphasis added).  As we said in
Marcotte, the plain language of section 652(1)(A) precludes exempting the
Marcotte building from taxation because a portion of the building, though
owned by Marcotte, was not occupied or used by Marcotte "solely" for
Marcotte's charitable purposes.
	[¶7]  The Board found that the property occupied by the Lewiston
thrift store was owned by The Salvation Army and occupied and used solely
for its own purposes, a factual finding that is supported by the record and
therefore not clearly erroneous.  The Salvation Army has thus satisfied the
prerequisites to tax exemption--ownership combined with occupation or use
by the charity for its own charitable purposes.
 	The entry is:
					Judgment affirmed.
                    
Attorney for plaintiff: Robert S. Hark, Esq., (orally) Hark·Andrucki·Fournier P O Box 7120 Lewiston, ME 04243-7120 Attorney for defendant: Andrew B. Choate, Esq., (orally) Fales & Fales, P.A. P O Box 889 Lewiston, ME 04243-0889
FOOTNOTES******************************** {1} 36 M.R.S.A. § 652(1)(A) states in pertinent part: 1. Property of institutions and organizations. A. The real estate and personal property owned and occupied or used solely for their own purposes by benevolent and charitable institutions incorporated by this State, and none of these may be deprived of the right of exemption by reason of the source from which its funds are derived or by reason of limitation in the classes of persons for whose benefit such funds are applied. . . . .