Supervisor of Assessments v. Lodge 817

Melvin, J., delivered the opinion of the Court. This is an appeal of the Supervisor of Assessments of Wicomico County from an Order, dated April 1, 1980, of the Circuit Court for Wicomico County affirming as not "clearly erroneous” an Order of the Maryland Tax Court, dated November 8, 1979. The Tax Court’s order, in turn, affirmed a decision of the Property Tax Assessment Appeal Board of Wicomico County exempting from taxation for fiscal year 1977-78 a nine-hole private golf course owned by the appellee, Lodge #817, Trustees Benevolent and Protective Order of Elks (hereinafter referred to as the Lodge) and used solely for the recreational benefit of members and guests of that organization. The golf course covers approximately 57 acres of the Lodge’s total acreage of approximately 66 acres located at Salisbury, Maryland.

Article 81, § 8 (Md. Ann. Code, 1957, 1980 Repl. Vol.) subjects all real property, "by whomsoever owned,” to assessment and taxation for ordinary taxes in this State "in the county and/or city in which the same is situated.” Section 9 of Article 81 provides for various exemptions, "which exemptions shall be strictly construed.” (Emphasis added.) The Tax Court decided the Lodge was entitled to exemption for its golf course under § 9 (e) of Article 81. In pertinent part § 9 (e) provides exemption for the following: "Property owned by ... any non-profit charitable, fraternal or sororal, benevolent . .. organizations ...; when any of such property described above is actually used exclusively for and necessary for charitable, benevolent . .. purposes (including athletic programs and activities of an educational institution) in the promotion of the general public welfare of the people of the State. In the case of fraternal or sororal organizations, the exemption shall extend only to those existing solely for the mutual benefit of their members and beneficiaries, which have a lodge system with ritualistic form of work and a representative form of government, and this term shall not mean any college or high school ³²¹ fraternities or sororities or other fraternal or sororal organizations with membership which is restricted wholly or largely to students or graduates of educational institutions or professional schools.

This exemption shall also extend to any property used for the purposes set out in this subsection, which is held by a corporation or association or by trustees for the sole benefit of any of the above organizations. . ..” (Emphasis added.) In its Memorandum of Grounds for Decision, the Tax Court stated: "Our reading of this Section indicates that fraternal organizations such as the Respondent enjoy a unique status among the other organizations which the Legislature sought to provide an exemption from real property taxes. We think it is significant to note that by Subsection 2 of 9 (e), the Legislature has distinguished between non-profit charitable, benevolent, educational, literary, and fraternal organizations. This distinction is carried further when the statute defines those fraternal organizations to which the exemption shall extend. As it applies to fraternal organizations, we think that Section 9 (e) evidences the legislative intent or policy, to promote such organizations recognizing that the purpose of such organizations, is as much for the mutual benefit of their members as well as to have some charitable or benevolent purpose.

The undisputed evidence in this case indicates that the Respondents are a fraternal organization which have a lodge system and a ritualistic form of work and the representative form of government. Additionally, the evidence is clear that the Respondents are a non-profit fraternal organization. Accordingly, for the reasons set forth above, we shall pass an order affirming the decision of the ³²² Property Tax Assessment Appeal Board of Wicomico County.” It thus appears that the Tax Court was of the opinion that simply because the golf course is owned by the Lodge and because the Lodge meets the statutory definition of a non-profit fraternal organization, the golf course property is exempt from taxation. The exemption afforded by § 9 (e), however, is based not only on the type of organization that owns the property but