## Facts

- Christian Home for the Aged, Inc., doing business as Appalachian Christian Village, operated a retirement community in Johnson City, Tennessee.
- The Village opened in 1966 under the sponsorship of the Christian Churches and Churches of Christ. It was a nonprofit Tennessee corporation and exempt from federal income tax under Internal Revenue Code § 501(c)(3).
- The Village offered multiple living arrangements tied to residents’ needs: independent living in cottages/townhouses or “towers” apartments, efficiency apartments for residents needing some daily assistance, and a nursing home for residents needing nursing care.
- To enter the independent-living portion, residents were required to make a large, nonrefundable “donation” (over $62,000).
- Residents in efficiency apartments paid monthly rent (about $485–$780). Nursing-home residents paid a daily rate (about $37 per day).
- The Village also provided recreational activities and maintained a chapel where religious services were held.
- Applicants were evaluated on factors including moral character, relationship to the sponsoring churches, health, and financial circumstances.
- Although the Village received some donations, its operating revenues were primarily derived from resident charges; charitable contributions were a small portion of total income.
- The Village applied for a property-tax exemption under Tenn. Code Ann. § 67-5-212, claiming the property was used for religious and charitable purposes.
- The Tennessee Assessment Appeals Commission denied the requested religious and charitable exemptions for most of the property, granting exemption only for (1) the chapel, as property used for religious services, and (2) the nursing facility, as a licensed provider of health care.
- The Village sought judicial review in the Davidson County Chancery Court, which upheld the Commission’s decision. The Village then appealed to the Tennessee Court of Appeals.

## Issues

1. Whether the Village’s property, other than the chapel, was “used exclusively for religious purposes” so as to qualify for a religious-use property-tax exemption under Tenn. Code Ann. § 67-5-212.
2. Whether the Village’s property, other than the chapel and the licensed nursing facility, was “used purely and exclusively” for charitable purposes so as to qualify for a charitable-institution property-tax exemption under Tenn. Code Ann. § 67-5-212.

## Decision

- The Court of Appeals affirmed the chancery court’s judgment upholding the Commission.
- The court held that the Village’s property other than the chapel was not used exclusively for religious purposes, so it was not exempt on a religious-use theory.
- The court held that the Village’s retirement-community property, apart from the licensed nursing facility, was not used purely and exclusively for charitable purposes, so it was not exempt on a charitable-use theory.
- The practical result was that the chapel remained exempt as religious-use property and the nursing facility remained exempt based on its licensed health-care use; the remaining residential and related facilities were taxable.

## Legal Principles

- Property-tax exemptions are strictly construed, and the taxpayer bears the burden to show the exemption applies.
- Under Tenn. Code Ann. § 67-5-212, the “exclusive use” requirement focuses on the direct, physical use of the specific property, not merely the owner’s nonprofit status or religious affiliation.
- A religious organization does not receive a blanket exemption for all its real estate; property must itself be used exclusively for religious worship or other qualifying religious use.
- For charitable exemptions, the statute requires that property be used “purely and exclusively” for charitable purposes; charging substantial fees and operating primarily on resident payments can weigh against a finding of exclusive charitable use for the property at issue.
- “Charitable institution” status (including nonprofit and 501(c)(3) status) does not automatically establish that each part of the institution’s property is used purely and exclusively for charity.
- Where the administrative fact findings are uncontroverted and adopted by the trial court, the appellate court accepts those findings and reviews whether the legal standard for exemption is met on those facts.

## Conclusion

The Tennessee Court of Appeals held that Appalachian Christian Village’s fee-based retirement-community property did not qualify for broad religious or charitable property-tax exemptions under Tenn. Code Ann. § 67-5-212 because the direct use of most of the campus was residential housing and related services for selected, paying residents rather than exclusive religious worship or exclusive charitable use; only the chapel and the licensed nursing facility remained exempt.


Christian Home for the Aged, Inc. v. Tennessee Assessment Appeals Commission, 790 S.W.2d 288 (1990)