CHARLESTON – The West Virginia Supreme Court of Appeals has ruled that the Hampshire County Assessor’s denial of an ad valorem property tax exemption was proper, as Global Capital of World Peace’s property was not being used for charitable purposes within the meaning of West Virginia code.

The circuit court upheld both the county assessor’s and the county commissioner’s denial of an ad valorem property tax exemption to Global for its Hampshire County property, according to the Nov. 9 memorandum decision.

“The circuit court reasoned that the property was not being used for charitable purposes within the meaning of West Virginia Code § 11-3-9 (2013),” the decision states. “Petitioner argues that it is entitled to the exemption.”

The court found no substantial question of law and no prejudicial error.

Global owns 355 contiguous acres in Hampshire County. The property contains improvements, including buildings which house approximately 100 permanent residents (all single males), along with a communal kitchen and dining hall. The residents are not charged for their lodging, but they make donations to Global. The campus has gardens, an extensive trail system and a forest buffer.

The property also has buildings for hosting meditation retreat weekends, as well as week-long and 10-day courses on Transcendental Meditation. Those classes, seminars and workshops are offered to single men only and are conducted by the Maharishi Purusha Program for individuals seeking spiritual development and enlightenment through the study and practice of TM.

The MPP advertises the classes, accepts applications, screens applicants and charges a course fee for the participants. In 2014 and 2015, classes ranged from $425 for a two-day weekend class to $1,900 for the 16-day New Year’s TM workshop. Only paying customers can attend the TM classes; however, the permanent residents on the property, who are members of the MPP, attend the classes at no charge.

There is no formal lease agreement between Global and the MPP. However, the MPP makes donations to Global. The MPP reported making grants to Global in the amount of $675,233 for 2013-2014 fiscal year, and $986,902 for the 2014-2015 fiscal year on the Internal Revenue Service form 990. No other organizations use this property.

Both Global and the MPP are exempt from federal income taxes under Section 501(c)(3) of the Internal Revenue Code. Both corporations have the same corporate purpose—to “foster global world peace through the teaching and promotion of TM.” Global and the MPP receive tax deductible donations from individuals and organizations, which have enabled Global to expend nearly $4.5 million to improve this parcel of real estate.

In January 2015, Global’s application for exemption of this real property for 2015 ad valorem property tax purposes was denied by the Hampshire County Assessor. The corporation objected, and requested that the matter be submitted to the Tax Commissioner. The Tax Commissioner also denied the requested exemption in Property Tax Ruling 15-50.

Global appealed the matter to the circuit court and discovery commenced. 

On June 15, 2016, the circuit court conducted a hearing on certain pending motions. The assessor and the state tax commissioner filed motions for summary judgment and the circuit court held a hearing on those motions on Oct. 5, 2016. It granted the motions and Global then appealed.

“Although Petitioner articulates laudable goals of psychological, physical and social wellbeing of practitioners of TM, Petitioner rigorously restricts the potential class of beneficiaries who use this property, even more so than the taxpayers in Maplewood,” the decision states. “Therefore, this property is not used ‘exclusively’ for charitable purposes. Restrictions on the class of beneficiaries must be carefully scrutinized to ensure that the charity uses its property in such a way that it provides a service to the public at large.

Several factors lead to the conclusion that the property is not used for the benefit of an indefinite number of persons: the blanket exclusion of women and married men; the significant financial barriers, considering the costs of the workshops and seminars; and the restrictions limiting the use of the property to members of Global, the MPP and screened applicants who are able to demonstrate sufficient proficiency in their practice of TM. 

“Having failed to meet the exclusive use test established in Wellsburg, Petitioner is not entitled to the exemption from ad valorem property taxes set forth in West Virginia Code § 11-39,” the decision states.

Accordingly, the circuit court properly ruled that Global has not demonstrated that an exemption for the 2015 ad valorem property tax for its Hampshire County property is warranted.

W.Va. Supreme Court of Appeals case number: 16-1061

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