Request By:
Mr. John C. LaVelle
Deters, Benzinger & LaVelle
Attorneys at Law
P.O. Box 972
219 Garrard Street
Covington, Kentucky 41011
Opinion
Opinion By: Robert F. Stephens, Attorney General; By William S. Riley, Assistant Attorney General
In your recent letter to the Attorney General, it is stated that St. Mary's Cemetery is an unincorporated cemetery association owned and operated by the Roman Catholic Diocese of Covington. The association operates a cemetery by selling burial plots, providing related services and carrying out all of the duties necessary to maintain the cemetery in its proper condition. No part of the earnings of the association inure to the benefit of or are distributed to its members, directors, officers or any other private persons except for reasonable compensation paid for necessary services rendered. All of the earnings are used by the association to maintain and beautify the cemetery which is dedicated to providing to the Northern Kentucky Catholic community a suitable place of burial for its deceased members.
The association has recently purchased a pick-up truck. The question is whether the truck is subject to Kentucky motor vehicle usage tax before it can be licensed. The additional question is whether it is a non-profit cemetery within the meaning of the Kentucky Constitution § 170 so as to be exempt from paying the Kentucky motor vehicle usage tax on automobiles which it uses in its operations.
Under Section 170 of the Kentucky Constitution, institutions of purely public charity are exempt from taxation. In recent years the court has expanded the definition of purely poblic charity as evidenced by the cases of Commonwealth of Kentucky v. Grand Lodge of Kentucky, Ky., 459 S.W.2d 601 (1970), Commonwealth of Kentucky, ex rel., Luckett v. Isaac W. Bernheim Foundation, Ky., 505 S.W.2d 762 (1974) and Banahan v. Presbyterian Housing Corporation, Ky., 553 S.W.2d 48 (1977). In the Grand Lodge of Kentucky case, the court stated that it is not necessary that property be employed directly in charitable work. That it is sufficient that the ultimate effect of the use of property is to accomplish the charitable purposes of the institution. In the Isaac W. Bernheim case, the statement was made that charity is broader than relief to the needy poor and includes activities which reasonably better the condition of mankind. Also see the Presbyterian Housing Corporation case where the charity spoken of was to assist elderly persons obtain decent housing at a low cost within their means.
In the Bernheim Foundation case, the court reiterated the point that tax exemptions deprive the treasury of revenue which must be replenished from other sources and consequently all claims for tax exemptions should be carefully scrutinized. The thread that runs through all of the cases cited, supra, appears to be that the court will expand the exemption in the case of charitable institutions where the benefit is to living persons. Nowhere has the court permitted such an exemption as that asked for cemeteries.
Until such time as the court sees fit to expand its charitable definition to include vehicles owned by cemetery organizations from the motor vehicle usage tax, we must conclude that such vehicles are subject to such tax.