IN THE MATTER OF THE APPEAL OF: GRANDFATHER MOUNTAIN STEWARDSHIP FOUNDATION, INC., from the Decision of the Avery County Board of Equalization and Review Concerning the Valuation of Real Property for Tax Year 2011
Heard in the Court of Appeals April 22, 2014
Property Tax Commission sitting as the State Board of Equalization and Review. 11 PTC 068.
Poyner Spruill LLP, by Chad W. EssickMr. and Andrew H. ErteschikMr., and Harrison & Poore, PA, by Michaelle Poore, for appellant Avery County.
Tuggle Duggins, P.A., by Martha R. SacrintyMs. and Mr. Michael S. Fox, for appellee Grandfather Mountain Stewardship Foundation.
BRYANT, Judge. Judges Robert C. HUNTER, and STEELMAN concur.
Appeal by Avery County from orders entered 21 February and 24 June 2013 by the North Carolina Property Tax Commission. Heard in the Court of Appeals 22 April 2014.
Where the property was not wholly and exclusively used for educational or scientific purposes pursuant to North Carolina General Statutes, sections 105-275(12) and 105-278.7(a), we reverse the order of the North Carolina Property Tax Commission granting Grandfather Mountain Stewardship Foundation exemption from property taxes.
Grandfather Mountain Stewardship Foundation, Inc. (GMSF), filed an application for exemption from property taxes in Avery County listing three parcels of real property (the subject property). In its 24 December 2010 application, GMSF indicated that the tax exemption was sought due to GMSF's status as a charitable or educational foundation pursuant to N.C. Gen. Stat.
§ 105-278.7. The Avery County Tax Assessor's Office denied GMSF's application due to the belief " that Grandfather Mountain is not 'Wholly and exclusively used by its owner for nonprofit educational, scientific, literary purposes' as defined by NCGS
§ 105-278.7(a)(1)." GMSF appealed to the Avery County 2011 Board of Equalization and Review, stating " [t]he property qualifies as tax exempt under N.C. Gen. Stat.
§ 105-278.7 and N.C. Gen. Stat. § 105-275(12) . . . ." The Equalization and Review Board also denied the request for tax exempt status. GMSF filed a notice of appeal and application for hearing with the North Carolina Property Tax Commission (the Commission).
On 24 June 2013, following a 10 April 2013 hearing, the Commission entered an order in which it concluded that GMSF was a charitable association; that the revenue GMSF collected from the operation of the real property funded the educational and scientific uses of the property; any structures on the real property that were not used directly for scientific or educational purposes were incidental to the scientific and educational uses of the property; and the subject property  was " wholly and exclusively used for scientific and educational purposes." The Commission concluded that " [e]ach of the tracts [was] eligible as exempt under both [General Statutes, sections 105-275(12) and 105-278.7] . . . ." Avery County appeals to this Court.
On appeal, Avery County raises the following issues: the Commission erred by (I) exempting the property from taxation; (II) holding that the property satisfied the ownership requirements for an exemption; and (III) holding that the vacant lot is exempt from taxation.
Avery County argues that the Commission erred by exempting the property from taxation because the property is a self-described tourist attraction that is not " wholly and exclusively used for educational or scientific purposes." Specifically, Avery County contends the Commission erred in concluding GMSF was eligible for a tax exemption under both N.C. Gen. Stat. '' 105-275(12) and 105-278.7 because (A) the property was not " wholly and exclusively" used for educational and scientific purposes; (B) the conclusion should have been predicated on how the
property was used rather than how the income generated from the property was spent; and (C) the income generated from the property is more than incidental income. For the most part, we agree.
" Statutes exempting property from taxation due to the purposes for which such property is held and used must, of course, be strictly construed against exemption and in favor of taxation." In re Forestry Found., 35 N.C.App. 414, 428--29, 242 S.E.2d 492, 501 (1978) (citations omitted), aff'd, 296 N.C. 330, 250 S.E.2d 236 (1979); see also In re Appeal of Totsland Preschool, Inc., 180 N.C.App. 160, 164, 636 S.E.2d 292, 295 (2006) (" [A]ll ambiguities are to be resolved in favor of taxation." (citations omitted)). " [T]he taxpayer bears the burden of proving that its property is entitled to an exemption under the law." In re Appeal of Eagle's Nest Found., 194 N.C.App. 770, 773, 671 S.E.2d 366, 368 (2009) (citation omitted).
Appeal from an order or decision of the Property Tax Commission shall lie to the Court of Appeals. See N.C. Gen. Stat. § 105-345(d) (2013). " Questions of law receive de novo review, while issues such as sufficiency of the evidence to support the Commission's decision are reviewed under the whole-record test." In re Appeal of Greens of Pine Glen Ltd. P'ship, 356 N.C. 642, 647, 576 S.E.2d 316, 319 (2003) (citing N.C.G.S. § 105-345.2(b)). This Court " may affirm or reverse the decision of the Commission, ...