Appeal from Kansas Board of Tax Appeals.
1. Orders of the Kansas Board of Tax Appeals (BOTA) are subject to judicial review under the Kansas Act for Judicial Review and Civil Enforcement of Agency Actions (KJRA), K.S.A. 77-601 et seq. K.S.A. 74-2426(c). K.S.A. 77-621(c)(4) requires the appellate court to grant relief if the agency has erroneously interpreted or applied the law.
2. If BOTA's interpretation of law is erroneous as a matter of law, appellate courts will take corrective steps.
3. Tax exemption statutes are to be construed strictly in favor of imposing the tax and against allowing the exemption for one who does not clearly qualify.
4. Although K.S.A. 2006 Supp. 79-201a Second establishes exemption from ad valorem taxation for property used exclusively by the State, this statutory subsection is not the exclusive exemption provision for all such property. Property owned by the State may qualify for exemption under other statutory provisions, including K.S.A. 2006 Supp. 79-201.
5. K.S.A. 79-201 Second was amended in 1986 to add language forgiving nonexempt uses where such use is "minimal in scope and insubstantial in nature, if such use is incidental to the exempt purposes" outlined in the statute.
6. Under the facts of this case, property owned and operated by a state educational institution for a residential use that is minimal in scope and incidental to the educational and scientific purposes for the property, qualifies for tax exemption under K.S.A. 79-201 Second.
The opinion of the court was delivered by: Greene, J.
Reversed and remanded with directions.
Before RULON, C.J., GREENE, J., and LARSON, S.J.
Kansas State University Southeast Agricultural Research Center (KSU) appeals from the decision of the Kansas Board of Tax Appeals (BOTA) denying its application for an exemption from ad valorem taxation of a home provided for a caretaker of its research farm in Labette County. Concluding that BOTA erred in denying the exemption, we reverse and remand with directions to grant KSU's application.
Factual and Procedural Overview
KSU is a state educational institution maintaining a research facility at an isolated location in Labette County for a rather extensive cattle operation. In 2005 KSU purchased a small manufactured home to be located on the facility and to serve as living quarters for a caretaker providing security for the property. KSU sought an exemption from ad valorem taxation for the home by filing an application to BOTA, suggesting that the property was entitled to exempt status under both K.S.A. 2004 Supp. 79-201 Second and K.S.A. 2004 Supp. 79-201a Second.
In its application to BOTA for a tax exemption, KSU designated the use of the property as: "Living quarters for employee who provides security for the research farm, including its livestock, equipment and fuel." Where the application inquired as to other individuals, groups, or organizations that use the subject property and how they use it, KSU stated: "None." Where the application asked to indicate whether a fee is charged in relation to the use of the subject property, KSU replied: "No fee is charged." In response to a ...