WORLD WAR II THEATRE INC v. WHITE (2026)

This is a tax dispute. Appellant Erroll G. Williams, in his capacity as Assessor for the Orleans Parish Assessor's Office (the “Assessor”), appeals the May 12, 2025 judgment rendered by the Board of Tax Appeals, State of Louisiana, Local Tax Division (the “BTA”). The judgment found that Appellee, World War II Theatre, Inc. (the “Theatre”), was exempt from the taxes it paid under protest for City of New Orleans 2022 Original Business Personal Property Tax Bill No. 102102511P in the amount of $183,596.99 and City of New Orleans 2022 Original Real Estate Tax Bill No. 102103307 in the amount of $370,425.44 (collectively, the “2022 taxes”). After calculating the accrued interest on the monies paid under protest and placed into escrow, the BTA awarded the Theatre refunds in the amounts of $186,571.26 and $376,426.33. For the reasons that follow, we affirm the BTA's May 12, 2025 judgment and find that the Theatre is exempt from ad valorem taxes for the 2022 tax year.

CURRENT PROCEDURAL AND JURISDICTIONAL POSTURE

The Louisiana Supreme Court recently vacated this Court's opinion published in World War II Theatre, Inc. v. White, 25-0398 (La. App. 4 Cir. 2/2/26), ––– So.3d ––––, 2026 WL 265640. (“World War II 2.0”). In that case, this Court noted that La. R.S. 33:2828(D)—which provided, in pertinent part, that “[e]ach assessor shall evaluate and grant or deny the request for tax exemption, or grant a partial tax exemption based on the assessed value of that proportion of the property not being used for an exempt purpose”¹ —was not constitutionally challenged in the lower court; therefore, it was waived. This Court vacated the BTA's judgment and remanded the matter to allow the BTA and the Assessor to adhere to and apply the directives pertaining to partial exemptions found explicitly in La. R.S. 33:2828(D), in effect at the time of this litigation.

In a per curiam,² the Supreme Court remanded the matter to this Court in order to allow the parties to plead the unconstitutionality of La. R.S. 33:2828(D). This Court was further ordered to consider and rule on the merits of any such constitutional challenge and, depending upon our ruling, to address any assignments of error previously pretermitted by this Court.

In response, on June 16, 2026, this Court issued a briefing schedule for the parties and set the matter for oral argument on August 26, 2026. Following, on June 29, 2026, this Court issued another order, directing the parties to show cause in writing why this Court has jurisdiction to hear a constitutional challenge pursuant to Article V, § 5(D) of the Louisiana Constitution and Article V, § 10, setting forth the jurisdictional limits of the state courts of appeal, and in light of La. C.C.P. arts. 855.1 and 1845. We further ordered the parties to show cause why this matter should not be transferred to the Board of Tax Appeals pursuant to La. C.C.P. art. 2162 and La. R.S. 13:4441, in order for the Board to determine the constitutionality of La. R.S. 33:2828(D), pursuant to its legislative authority to do so as set forth in La. R.S. 47:337.63(C).³ For the following reasons we find that, based upon the specific facts of this case, the BTA correctly interpreted and applied La. Const. art. VII, § 21(B). Accordingly, we affirm the May 12, 2025 judgment rendered by the BTA, finding that World War II Theatre, Inc. (the “Theatre”) is exempt from ad valorem property tax for the year 2022. Before addressing the merits of this appeal, we are compelled to discuss a jurisdictional issue.

Jurisdiction

Notwithstanding the mandate set forth in the Supreme Court's per curiam and with all due deference to that body, after careful consideration of the applicable provisions of the Louisiana Constitution, the Louisiana Code of Civil Procedure, the Louisiana Revised Statutes and relevant jurisprudence, this Court finds that it is without jurisdiction to consider the constitutionality of former La. R.S. 33:2828(D). In World War II 2.0, this Court allowed supplemental briefing as to why La. R.S. 33:2828(D) is or is not controlling in this case. In those supplemental briefs and for the first time in the course of this litigation, the parties raised the issue of whether that statute was in conflict with our constitution and, therefore, unconstitutional.

Article V, § 5(D) of the Louisiana Constitution provides that a case shall be appealable to the Louisiana Supreme Court when “a law or ordinance has been declared unconstitutional.” Article V, § 10, setting forth the jurisdictional limits of the state courts of appeal, contains no such similar provision. See, e.g., Cartesian Co., Inc. v. Div. of Admin. L. Ethics Adjudicatory Bd. Panel A, 22-0158, p. 3 (La. App. 1 Cir. 9/16/22), 352 So.3d 1021, 1023 (wherein the court of appeal noted that “[b]ecause the judgment at issue declared a portion of [a statute] facially unconstitutional and unconstitutional as applied to the plaintiffs, the Louisiana Supreme Court has exclusive appellate jurisdiction over this appeal pursuant to La. Const. Art. V, Sec. 5(D). This court has no jurisdiction to consider the appeal.”). In Vallo v. Gayle Oil Co., Inc., our Supreme Court explained:

Our Code of Civil Procedure does not require a single procedure or type of proceeding for challenging or assailing the constitutionality of a statute. However, the long-standing jurisprudential rule of law is: a statute must first be questioned in the trial court, not the appellate courts, and the unconstitutionality of a statute must be specially pleaded and the grounds for the claim particularized. Johnson v. Welsh, 334 So.2d 395, 396–97 (La.1976); State ex rel. McAvoy v. Louisiana State Bd. of Medical Examiners, 115 So.2d at 836 [the unconstitutionality of a statute cannot be asserted in the appellate court unless it has been pleaded and made an issue in the court of first instance]; Becker v. Allstate Ins. Co., 307 So.2d 101, 103 (La.1975); Summerell v. Phillips, 258 La. 587, 247 So.2d 542, 546 (1971); State v. de St. Romes, 26 La.Ann. 753, 754 (1874), on rehr'g; De Blanc v. De Blanc, 18 So.2d 619, 623 (La. App. Orleans, 1944).

The pleadings allowed in civil actions are petitions, exceptions, written motions and answers. [La.] C.C.P. art. 852.[ ] Therefore, when the unconstitutionality of a statute is specifically pled, the claim must be raised in a petition (the original petition, an amended and supplemental petition or a petition in an incidental demand), an exception, a motion or an answer.[ ] It cannot be raised in a memorandum, opposition or brief as those documents do not constitute pleadings.

94-1238, p. 8 (La. 11/30/94), 646 So.2d 859, 864-65.

Furthermore, in 2024 our Legislature added La. C.C.P. art. 855.1, which expressly mandates, in part, that “[a]ll civil actions alleging that a law is unconstitutional shall be in writing and be brought in an ordinary proceeding.” In the same legislative act, La. C.C.P. art. 1845 was added, directing that “[a] judgment rendering a law unconstitutional is absolutely null and shall be void and unenforceable if the provisions of Article 855.1 have not been met.” As a result, we find that because a constitutional challenge to La. R.S. 33:2828(D) was never raised by either party in the lower court, this Court is without jurisdiction to decide that issue.

Nevertheless, when invited by this Court to plead the unconstitutionality of La. R.S. 33:2828(D) as the Supreme Court ordered, both parties expressly declined to do so. Each party argued that in his oral reasoning at the August 11, 2022 hearing, the BTA judge interpreted the statute in a manner that did not conflict with the First Circuit decision in Johnson v. New Orleans Charities Bldg. Corp., 00-2772 (La. App. 1 Cir. 2/15/02), 812 So.2d 741,⁴ and that his interpretation was in harmony with La. Const. art. VII, § 21(B).⁵ It was the BTA judge's determination that each individual piece of property of a nonprofit organization should be analyzed on its own merit to determine whether it is operated for a commercial purpose related to the organization's charitable purpose. Following that determination, each individual property or parcel would either be wholly exempt or not exempt in its entirety. After review, we agree and find that the BTA's interpretation of La. R.S. 33:2828(D) is in accord with Johnson and La. Const. art. VII, § 21(B). Thus, there is no need to address the constitutionality of that statute.

PRIOR PROCEDURAL AND FACTUAL BACKGROUND

For consistency we incorporate the procedural and factual background as recited in our opinion in World War II 2.0, in extenso.

Many of the facts leading to the instant appeal were previously recited by this Court in World War II Theatre, Inc. v. White, 24-0474 (La. App. 4 Cir. 2/18/25), 409 So.3d 275 (“World War II 1.0”). We will use portions of that recitation here. The property at issue is the Higgins Hotel & Conference Center (the “Hotel”), which is wholly owned and operated by the Theatre. “The Theatre is a 501(c)(3) nonprofit corporation,⁶ whose sole shareholder is National World War II Museum, Inc. ([the] “Museum”).” World War II 1.0, 24-0474, p. 2, 409 So.3d at 278. “The Theatre owns the Hotel[,] which is located across the street from the Museum.” Id. “The Theatre filed an application in 2020 for tax exempt status of the Hotel for tax year 2021, which was denied by the Assessor.” Id. The Assessor then issued to the Hotel tax bills for property and business personal property taxes for the 2022 tax year, both of which had a delinquency date of March 16, 2022. “On or about February 15, 2022, the Theatre paid the taxes under protest.” Id. “Pursuant to La. R.S. 47:2134(C)(1)-(2),⁷ the Theatre notified the tax collector of its intention to file suit.” Id.

As more specifically laid out in World War II 1.0:

On March 8, 2022, the Theatre filed a [Petition to Recover Taxes Paid Under Protest (the “Petition”)]. In [the Petition], the Theatre alleged that it [was] entitled to exemption from ad valorem taxes pursuant to La. Const. art. VII[, §] 21(B) and had timely filed the application for exemption. The Assessor filed peremptory exceptions and an answer on April 7, 2022. On June 7, 2022, the Theatre filed a motion for summary judgment seeking a judgment that it was entitled to tax exemption for the tax year 2022. On June 15, 2022, the Assessor filed supplemental exceptions of no cause of action, no right of action and prescription alleging that pursuant to La. R.S. 33:2828(D), the Assessor's exceptions should be sustained because the Theatre failed to timely apply for the tax exemption.

On August 11, 2022, the BTA held a hearing on the Assessor's peremptory exceptions. The BTA rendered judgment and denied the Assessor's exceptions of no cause of action, no right of action and prescription. On November 8, 2022, the Assessor filed a cross motion for summary judgment arguing that the Theatre's tax-exempt status should be denied. On December 8, 2022, the BTA held a hearing on both motions for summary judgment. The BTA rendered judgment denying all the motions for summary judgment on March 8, 2023.

The matter proceeded to trial on September 14, 2023. On December 13, 2023, the BTA issued its Order with Written Reasons. The BTA ruled in favor of the Theatre, finding that the Hotel operates in support of the Museum's mission and the Hotel and its amenities are essential to the Museum's charitable purpose. The BTA also held that the Hotel was exempt from Orleans Parish ad valorem taxes for 2022, and that the Theatre was entitled to a full refund of the payments paid under protest.

Id. at pp. 2-3, 409 So.3d at 278.

In its Written Reasons for the December 13, 2023 Order, the BTA relied on: its interpretation of La. Const. art. VII, § 21(B); the decision rendered in the case of Hotel Dieu v. Williams, 403 So.2d 1255 (La. App. 4 Cir. 8/31/81) aff'd 410 So.2d 1111 (La. 1982); and the testimony of Steven Watson (“Mr. Watson”), President of both the Theatre and the Museum. The BTA noted that when it reviewed the Theatre's federal tax returns, the Theatre reported some of its income as Unrelated Business Taxable Income (“UBTI”), which included revenue from such sources as: weddings; corporate parties; private group reservations; individual guests who did not identify the Museum as their reason for visiting; and revenue from the bars, restaurants and shops located in the Hotel. Mr. Watson testified that the UBTI was merely incidental to the amenities needed for the Hotel to support the Museum.

Mr. Watson then clarified that he had misspoken in an earlier deposition, in which he related that the Hotel was intended to grow the Museum's endowment. He explained that the endowment exists to support the educational, charitable and social purposes of the Museum and was used to fund scholarships, positions and exhibits. However, at the September 14, 2023 trial, Mr. Watson testified that the Hotel was not intended to be a source of funding for the endowment. He then went on to describe exactly how the Hotel supports and benefits the Museum. According to Mr. Watson, the Museum has a number of group programs and is the largest client of the Hotel. The Theatre provides group bookings for the Museum at below-market rates, and does not charge the Museum for the use of its conference center. This helps to facilitate the Museum's International World War II Conference, the largest conference of its kind, with over 35 speakers from around the world and 500 attendees over the course of three days. Additionally, the Museum provides educational residency programs, which include training for teachers and college faculty.

Interpreting La. Const. art. VII, § 21(B), the BTA found that, although the Theatre represented to the IRS that it had income that was either unrelated to its exempt purpose or not substantially related to its exempt purpose, § 21(B) does not require a substantial relationship [as mandated by 26 C.F.R. § 1.513-1(d)(2). That federal regulation provides:

Trade or business is related to exempt purposes, in the relevant sense, only where the conduct of the business activities has a causal relationship to the achievement of exempt purposes (other than through the production of income); and it is substantially related, for purposes of section 513, only if the causal relationship is a substantial, one.]

Finding Mr. Watson's testimony to be credible, the BTA concluded that: the Museum and its surrounding campus were working to accomplish their mission by becoming a cultural, educational and social institution; the Hotel provided convenient, discounted services to the Museum, was used primarily by the Museum, and was run in a way that prioritizes supporting the Museum's mission; and the Hotel and its amenities were essential to attracting and hosting cultural gatherings and academic symposia.

“The Assessor filed a motion for new trial arguing principally that new evidence, an Internal Revenue Service Form 990 [(“IRS Form 990”)] for the period July 1, 2021 through June 30, 2022, which was not available at the time of trial, [was] material to whether the Hotel qualifie[d] for the exemption.” World War II 1.0. at pp. 3-4, 409 So.3d at 279. On appeal, this Court affirmed the denial of the Assessor's exceptions of no cause of action, no right of action, and prescription; however, finding that the BTA erred when it did not consider the IRS Form 990, we vacated the judgment granting the Hotel tax exempt status and remanded the matter to the BTA for consideration of the IRS Form 990 in rendering a final judgment on the merits. World War II 1.0, 24-0474, p. 12, 409 So.3d at 283-84.

Shortly after we published that opinion, on February 27, 2025, the parties held a status conference, where it was stipulated that the matter on remand would be decided on the record—with the addition of the Theatre's IRS Form 990 for the 2022 tax year, the Assessor's Appellant Brief, the Theatre's Appellee Brief and the Assessor's Appellant Reply Brief. The IRS Form 990 revealed that the Theatre's UBTI from the Hotel was approximately 28% of its revenue. After considering this new information, the BTA issued another judgment and written reasons on May 12, 2025, finding that although the IRS Form 990 for the 2022 tax year reflected a slightly higher amount of UBTI for the Hotel than the previous year and that the Hotel turned a profit, it did not change the fact that the large majority of Hotel revenue was related to the Museum's charitable purpose—ergo, the Hotel is exempted from ad valorem property tax for 2022 pursuant to La. Const. art. VII, § 21(B). The Assessor timely appealed that decision. World War II 2.0, 25-0398 at pp. 1-6, 2026 WL 265640 at *1-3.

ASSIGNMENTS OF ERROR

As we explained in World War II 2.0, the Assessor offered five assignments of error for our review,⁸ which can be narrowed to a single issue—whether the BTA erred in its interpretation and application of La. Const. art. VII, § 21(B) when it found that the Hotel is exempt from payment of ad valorem property tax.

STANDARD OF REVIEW

“Louisiana Revised Statutes 47:1435[⁹ ] provides the courts of appeal with exclusive jurisdiction to review the decisions or judgments of the BTA.” Filmore Parc Apartments II v. White, 24-0475, 24-0476, p. 12 (La. App. 4 Cir. 2/14/25), 418 So.3d 42, 52. “An appellate court applies the manifest error standard of review to the Board's judgment.” Int'l Rivercenter Lessee, L.L.C. v. Robinson, 22-0428, p. 10 (La. App. 4 Cir. 12/28/22), 355 So.3d 1125, 1132.“That is, an appellate court will not reverse the Board's judgment unless the Board 1. ‘failed to correctly apply the law and adhere to procedural standards or’ 2. ‘the Board's findings of fact are manifestly erroneous in view of the evidence on the entire record.’ ” Id. (quoting Pinnacle Polymers, LLC v. St. John the Baptist Par. Sales, 19-310, p. 10 (La. App. 5 Cir. 3/24/21), 316 So.3d 1264, 1271);see also Int'l Paper, Inc. v. Bridges, 07-1151, p. 9 (La. 1/16/08), 972 So.2d 1121, 1127-28. “However, if the issue on appeal involves a purely legal question concerning interpretation of a statute, then an appellate court applies the de novo standard of review, offering no deference to the Board's factual findings or legal conclusions.” Id., 22-0428 at p. 11, 355 So.3d at 1132 (citing Barfield v. Bolotte, 15-0847, p. 5 (La. App. 1 Cir. 12/23/15), 185 So.3d 781, 785). “If the case presents a question of law and the BTA ‘has correctly applied the law and has adhered to the correct procedural standards,’ then the appellate court should affirm the BTA's judgment.” Filmore Parc, 24-0475, p. 13, 418 So.3d at 52 (quotingCiervo v. Robinson, 20-1106, p. 3 (La. App. 1 Cir. 4/16/21), 323 So.3d 893, 896). Therefore, because the salient issues before this Court involve the purely legal questions of statutory and constitutional interpretation, and because “[t]he Louisiana Constitution is generally interpreted using the same methods as statutes and other written instruments[,]” we will conduct a de novo review of the BTA's interpretation of La. Const. art. VII, § 21(B). State v. Breaux, 24-00737, p. 4 (La. 5/9/25), 408 So.3d 899, 903 (citing Succession of Lauga, 624 So.2d 1156, 1165 (La. 1993)). As more fully discussed below, having found that the BTA correctly interpreted that provision, we will review its application of that interpretation under a manifest error standard of review.

We now turn to the merits of the Assessor's appeal.

DISCUSSION 10

At all times pertinent to our review, the relevant portions of the Louisiana Constitution of 1974, Article VII, § 21 provided:

Section 21. In addition to the homestead exemption provided for in Section 20 of this Article, the following property and no other shall be exempt from ad valorem taxation:

* * *

(B)(1)(a)(i) Property owned by a nonprofit corporation or association organized and operated exclusively for religious, dedicated places of burial, charitable, health, welfare, fraternal, or educational purposes, no part of the net earnings of which inure to the benefit of any private shareholder or member thereof and which is declared to be exempt from federal or state income tax; and

* * *

None of the property listed in Paragraph (B) shall be exempt if owned, operated, leased, or used for commercial purposes unrelated to the exempt purposes of the corporation or association.[11]

The Assessor's argument pertaining to these constitutional provisions is divided into two categories: (1) the search for legislative intent; and (2) the interpretation and application of prior jurisprudence and IRS Private Letter Rulings and Technical Advice Memoranda. We will address each in turn.

Legislative Intent

In Retired State Employees Ass'n v. State, our Supreme Court reaffirmed the benchmarks it had previously set forth for constitutional interpretation:

The starting point in the interpretation of constitutional provisions is the language of the constitution itself. La. Mun. Ass'n v. State, 00–0374, p. 5 (La.10/6/00), 773 So.2d 663, 667. When a constitutional provision is plain and unambiguous, and its application does not lead to absurd consequences, its language must be given effect. Id. at pp. 5–6, 773 So.2d at 667; State ex rel. Guste v. Board of Com'rs. of Orleans Levee Dist., 456 So.2d 605, 609 (La.1984); Bank of New Orleans & Trust Co. v. Seavey, 383 So.2d 354, 356 (La.1980).

When the constitutional language is subject to more than one reasonable interpretation, however, the determination of the intent of the provision becomes necessary. Louisiana Mun. Ass'n., 00–0374 at p. 6, 773 So.2d at 667. In seeking to ascertain constitutional intent, the same general rules used in interpreting laws and written instruments are followed. Caddo–Shreveport Sales & Use Tax Comm'n. v. Off. of Motor Vehicles, 97–2233, p. 6 (La.4/14/98), 710 So.2d 776, 780; Radiofone, Inc. v. City of New Orleans, 93–0962, p. 6 (La.1/14/94), 630 So.2d 694, 698. This court has stated that the function of a court in construing constitutional provisions is to ascertain and give effect to the intent of the people who adopted it. Caddo–Shreveport, 97–2233 at p. 7, 710 So.2d at 780; Radiofone, 93–0962 at p. 6, 630 So.2d at 698. Additionally, we have determined that the understanding that can reasonably be ascribed to the voting population as a whole controls the interpretation. Id. In other cases, however, this court has stated that in construing constitutional provisions, a court should ascertain and give effect to the intent of both the framers of the amendment and of the people who adopted it. See Board of Com'rs. of Orleans Levee Dist. v. Dep't of Nat. Resources, 496 So.2d 281, 298 (La.1986) (on rehearing). All of these principles are correct statements of law. Nevertheless, to harmonize them, we will add that in construing an ambiguous constitutional provision, a court should ascertain and give effect to the intent of both the framers of the provision and of the people who adopted it; however, in the case of an apparent conflict, it is the intent of the voting population that controls. See Arata v. La. Stadium & Exposition Dist., 254 La. 579, 225 So.2d 362, 372 (1969).

13-0499, pp. 10-11 (La. 6/28/13), 119 So.3d 568, 575 (quoting E. Baton Rouge Par. School Bd. v. Foster, 02-2799, pp. 16-17 (La. 6/6/03), 851 So.2d 985, 996).

The E. Baton Rouge Court was faced with interpreting a constitutional provision that it found to be ambiguous. 02-2799 at p. 17, 851 So.2d at 997. Using the framework outlined above, the Supreme Court first looked to the House Committee on Appropriations, Minutes of Conference Committee Meeting to analyze the wording of the official ballot language that was presented to the voters. Finding the ballot language to be clear, the Court determined that what was relevant to its interpretation of the constitutional provision at issue included both the contemporaneous history surrounding the adoption of the provision and the ballot language. Id., 02-2799 at p. 21, 851 So.2d at 999.

Applying the Supreme Court's example here, in Volume II of the Official Journal of the Proceedings and Calendar of the Constitutional Convention of 1973 of the State of Louisiana, we see that the official ballot presented to the voting public consisted of nothing more than a simple choice of “for” or “against” the adoption of the Constitution as a whole.¹² Therefore, a review of the contemporaneous history of the adoption of the applicable portions of La. Const. art. VII, § 21 is necessary.

The Assessor relies on selected excerpts from Volume VIII Records of the Louisiana Constitutional Convention of 1973: Convention Transcripts ¹³ to support his position that any amount of commercial activity engaged in by the Hotel that is unrelated to the Museum's charitable purpose necessarily removes any property tax exemption the Hotel might otherwise have been entitled to. He avers that these excerpts represent the clear intent of the constitutional delegates. For example, the Assessor quotes from one of the co-authors of this section:

Mr. Comar ․ Now, a number of questions have been asked ․ with regard to the last phrase which says “unrelated to the exempt purposes of said corporations or associations.” It is my appreciation ․ that that means simply this: if a hospital operating as a nonprofit corporation, operates a parking lot open to the general public from which it makes a profit, then that is an unrelated income which would not be exempt ․

Mr. Comar ․ My understanding of it is this: if a hospital operates, for instance, a food service center for the convenience of its patients, that would be a related purpose to the nonprofit institution. If it operates, however, a general cafeteria open to members of the public, then it would not be exempt and that is the reason for this clause as I understand it.

We disagree with the Assessor's characterization of the transcript. Upon closer reading of the transcript as a whole, the following emerges:

Mr. Comar ․ However, I am no attorney, and I would prefer if maybe someone more acquainted with the tax laws would explain why that specific language was included in this amendment.14 It has very specific meaning, as I understand it, under the federal and state income tax laws.

In contrast, in a colloquy occurring prior to Mr. Comar's comments, another co-author of the section, Mr. Rayburn, was questioned by a fellow delegate:

Mr. Perez: Now let me ask you at the end of the first paragraph in (C) when you provide that you will not have an exemption for those - - “for property owned, operated or leased, or used for commercial purposes of such nonprofit corporation” – that means, then, that they can make all of the profit they want for a related business. That is, if they are operating a hospital, they can make all the profit they want but still not have to pay any taxes. Is that correct?

Mr. Rayburn: If they use such profit, Mr. Perez, to revert back into the hospital.

Mr. Perez: Where does it say that in this amendment, sir?

Mr. Rayburn: Well it says, “and used in related ․” that's supposed to be clear, Mr. Perez, as long as they put that money back into the particular hospital as a nonprofit organization, then it will not be taxable.

Mr. Perez: Well, Senator, you know I don't read it that way ․

And when pressed by another delegate, Mr. Rayburn offered:

Mr. Rayburn ․ I think this was the language was placed there, ․ the fact that a hospital - - a nonprofit hospital - - might lease a portion of that building to a blind person to run a concession stand. By doing so, certainly they didn't want the entire hospital to be placed on the assessment rolls and that was the reason for this language.

The following exchange occurred between two other delegates:

Mr. Sutherland: Well, that's the way you read it. But, I don't necessarily read it that way. I would like somebody to explain it to me, because I have three or four different answers. I think whoever put it ought to be able to explain it or it ought to come out.

Mr. Dennis: Matt, I don't see how you can put that interpretation on this. Clearly, Tulane is not going to be entitled to an exemption unless they come in one of these broad categories up at the top - - educational is where they would fall.

Mr. Sutherland: All right.

Mr. Dennis: Now, if they take some property downtown and lease it out for a haberdashery or something, that's clearly not related to an educational purpose and it would not be exempt ․ But, I ask you to look what you're doing if you take this out what you're doing to hospitals. Hospitals have to run some things that people make money out of in their hospitals, such as: X-ray labs, pathology labs, pharmacies, and I said cigar stands, but I'll amend that to say refreshment stands for Mrs. Warren's benefit. Now, somebody could come along and say these are commercial purposes. I don't think you ought to say that, but somebody might. If one of these purposes were to be classified as commercial, it would make the whole hospital be subject to taxes even though it is related to the operation of a hospital. So, that's the reason for that last line in there. As long as the hospital is doing something that is related to running a hospital, I don't think that it should lose its exemption even if somebody could classify it as commercial.

Another delegate, Mr. Lowe, offered a similar assessment:

Mr. Lowe: Now, if that hospital that is tax-exempt has a parking lot downtown five blocks away then they are in an unrelated business activity. That parking lot downtown has nothing to do with the activities, the exempt purpose for which that organization was organized and received its exempt status. So then, that unrelated business income is taxable; it's also, according to this amendment, taxable for ad valorem tax purposes.”

Mindful of the caveat voiced by our Supreme Court that “the understanding of one member, or even a few members, of the legislature is not determinative of legislative intent[,]” and in spite of Mr. Comar's comments, we find that the overall tenor of the delegate discussions evinces an intention to allow some measure of unrelated commercial activity. E. Baton Rouge, 02-2799 at p. 999, 851 So.2d at 22. See also Arata, 225 So.2d at 372 (“The understanding of these two members, however, does not establish a consensus of the 105 members of the House and 39 members of the Senate which we would consider necessary to establish the legislative intent.” In this case, the transcript reflects that 116 delegates voted to adopt the provisions at issue here.)¹⁵ Additionally, the activity must be proximate enough to be used for purposes related to the exempt purposes of the nonprofit organization. This argument is without merit.

Jurisprudence

Notwithstanding that the search for legislative intent can be instructive, for our purposes in this matter we find prior jurisprudence to be determinative. In Red Stick Studio De., L.L.C. v. State ex rel. Dep't of Econ. Dev., our Supreme Court unequivocally declared its role when it pronounced, “This court is the ultimate arbiter of the meaning of the laws of this state.” 10-0193, p. 9 (La. 1/19/11), 56 So.3d 181, 187 (quoting Holly & Smith Architects, Inc. v. St. Helena Congregate Facility, Inc., 06-0582, p. 9 (La. 11/29/06), 943 So.2d 1037, 1045). Moreover, “[t]he function of statutory interpretation and the construction given to legislative acts rests with the judicial branch of the government.” Id. (quoting M.J. Farms, Ltd. v. Exxon Mobil Corp., 07-2371, p. 13 (La. 7/1/08), 998 So.2d 16, 27).

To support his position, the Assessor relies on several Louisiana opinions: Whitten Found. v. Granger, 04-0934, (La. App. 1 Cir. 11/3/06), 950 So.2d 720; Johnson, 00-2772, 812 So.2d 741; Bd. of Adm'rs of the Tulane Educ. Fund v. La. Tax Comm'n, 97-0663, 97-0664 (La. App. 4 Cir. 10/1/97), 701 So.2d 702; Sherwood Forest Country Club v. Litchfield, 08-0194 (La. 12/19/08), 998 So.2d 56; Hotel Dieu v. Williams, 403 So.2d 1255 (La. App. 4 Cir. 8/31/81) (“Hotel Dieu I”); and (5) Hotel Dieu v. Williams, 410 So.2d 1111 (La. 1982) (“Hotel Dieu II”) (collectively, “Hotel Dieu”). For its part, the Theatre relies almost exclusively on the Hotel Dieu opinions, arguing that the facts presented there are analogous to those existing in the case sub judice and that—as the BTA held—the Supreme Court's opinion represents the controlling interpretation of La. Const. art. VII, § 21(B). The Theatre further avers that the Louisiana cases relied upon by the Assessor are inapplicable to the facts now before us. We begin with an analysis of Hotel Dieu.

In Hotel Dieu II, the Supreme Court succinctly addressed the crux of the question before it: “The issue is whether a nonprofit corporation which operates an office building and parking garage adjacent to Hotel Dieu Hospital is exempt from ad valorem taxes under [a]rt. [VII], § 21(B)(1) of the Louisiana Constitution of 1974.”¹⁶ As to the factual considerations, the Court summarized:

The office building and garage are constructed on land owned by Hotel Dieu Hospital, a nonprofit corporation organized solely “for charitable, religious, and educational purposes.” Its members are the Daughters of Charity of St. Vincent de Paul. The structures are owned and operated by Seton Professional Building, Inc., a nonprofit corporation organized for charitable purposes. Any profits made by Seton go to Hotel Dieu for treatment of the indigent and other hospital activities. Seton's membership is controlled by Hotel Dieu. It is an alter ego of the hospital. The Seton Corporation has operated at a deficit since the building opened in January of 1976. Both Seton and Hotel Dieu are exempted from federal and state income taxes.

There are sixteen tenants in the Seton building. Seton leases space only for medical purposes; nonmedical applications have been rejected. All the individual physicians in the Seton Building are members of the medical staff of Hotel Dieu. Ninety percent of these physicians send all of their patients to Hotel Dieu and the other ten percent send a substantial portion to Hotel Dieu. Other tenants consist of the New Orleans Academy of Ophthalmology, a pharmacy, two laboratories and LSU's private medical clinic which occupies two floors. Of the eighty-five doctors staffing the LSU clinic, sixty-four are members of the medical staff of Hotel Dieu. The hospital works closely with LSU in medical education including internships, residencies, and fellowships in surgery, renal medicine, orthopaedics, arthritis, family practice, internal medicine and urology.

A restaurant is the only Seton tenant with nonmedical activities. It is described as a necessary eating facility for physicians, staff members, patients and their families. The parking garage is open to the public, but its customers are primarily those who have business at the hospital or the professional building. Of its two hundred and eighty-one spaces, one hundred and eighty-one are contracted by physicians and other employees at Hotel Dieu, LSU and Seton.

Hotel Dieu II, 410 So.2d at 1111-12.

The Court explained that appellate review had been necessary because the district court “held that the Seton Building was not exempt from ad valorem taxes because it was not exclusively operated for tax exempt purposes.” Id., 410 So.2d at 1112. This Court and the Supreme Court disagreed. As detailed by this Court in Hotel Dieu I, a majority, but not all of the doctors who had private practice offices in the Seton building also had admitting privileges to the hospital. 403 So.2d at 1257. Further, of the private practice doctors in the building, 90% of the doctors sent all of their patients to Hotel Dieu when hospitalization was necessary, while the other 10% sent most, but not all of their patients. Id. And as we just recited from Hotel Dieu II, the Supreme Court noted that the portion of the parking garage that was open to the public was primarily—but not exclusively—used by those who had business at the hospital or the professional building. It is, perhaps, significant that the Court referred to those utilizing the parking garage as “customers,” but both Hotel Dieu I and II are silent as to any parking fees that may have been charged and collected. Nonetheless, the Supreme Court observed that Seton had operated at a deficit every year, but that any profits made by the corporation would go to Hotel Dieu for treatment of the indigent and other hospital purposes. Hotel Dieu II, 410 So.2d at 1111.

In its continued analysis, the Supreme Court set forth other considerations it used in reaching its decision: “One factor in determining exemption is location of the commercial activity. It is more easily classified as related to the exempt purpose if it is in an adjoining facility, like that here.” Id., 410 So.2d at 1112. Based on its review of the activities conducted by the Seton Corporation, the Court held that Seton's “structures are owned, operated, leased and used for purposes related to the exempt purposes of the Hotel Dieu Hospital.” Id. Finally, the Court pointed out that “[n]one of the earnings inure to the benefit of any private shareholder and the income of Hotel Dieu and the Seton Corporation is exempt from federal and state income taxes.” Id.

Applying that analysis to the facts now before us, we first note that, as the BTA observed in its March 8, 2023 Reasons for Judgment on Cross Motions for Summary Judgment, each case is decided according to its own facts and circumstances. Further, neither Hotel Dieu nor any of the other applicable jurisprudence provide a quantifiable bright-line rule that establishes an exempt relationship for the Hotel as a matter of law. Our reading of Hotel Dieu II leads us to the conclusion that our Supreme Court's interpretation of La. Const. Art. VII § 21(B) does not preclude any and all unrelated business income in order to qualify for the ad valorem property tax exemption, so long as there is a relationship between an entity's unrelated business activity and its exempt purpose. Furthermore, as in Hotel Dieu, the location of the Hotel weighs heavily in favor of its exemption and, as can be gleaned from its federal tax returns, none of the Hotel's income inures to the benefit of a private shareholder. Therefore, we find the Hotel is entitled to an exemption from ad valorem taxes for the 2022 tax year. To be clear, our analysis in this case is limited to the Hotel's 2022 tax year. If in any other tax year the Hotel's unrelated commercial business activity begins to eclipse its charitable purposes, it is quite possible the outcome would differ.

Next, the Assessor cites the opinion of the First Circuit court in Whitten for the proposition that “the property cannot be used for any commercial purpose unrelated to the exempt purposes of the corporation.” 04-0934 at p. 11, 950 So.2d at 727. We find this reliance is misplaced. First, “decisions of other circuits are not binding on this Court and are persuasive authority only.” Sebble on Behalf of Estate of Brown v. St. Luke's #2, 22-0620, p. 12 (La. App. 4 Cir. 3/6/23), 358 So.3d 1030, 1038 (quoting Shelton v. Pavon, 16-0758, p. 8 (La. App. 4 Cir. 2/15/17), 212 So.3d 603, 609).¹⁷ Secondly, Whitten is factually distinguishable from the matter we are now reviewing. There, a non-profit corporation owned an apartment complex, ostensibly for the purpose of providing affordable housing to low-income tenants. The corporation also rented apartments to non-low-income tenants; therefore, the local tax assessor sent a property tax bill. Upon review of the record, the court found the corporation had not given its low-income tenants any reduction in rent from the non-low-income tenants. Thus, the court found no evidence that the corporation was operating for a charitable purpose.

Additionally, the Assessor asserts that in his reading of Johnson, whether a property is exempt from property taxes is an all or nothing proposition. In Johnson, a real estate holding company for a foundation purchased a 10-story building for the purpose of providing virtually free office space to local charities, charging those charities only one dollar per year. Both the holding company and foundation were designated as charitable organizations pursuant to Internal Revenue Code §§ 501(c)(2) and (3), respectively. The holding company also rented space to four commercial businesses—a restaurant, an architectural firm, a dentist's office and a barber shop. After the assessor sent a tax bill levied against the whole property, the holding company paid under protest and appealed to the Orleans Parish Board of Review (“OPBR”). The OBPR ruled in the holding company's favor, finding that it was entitled to a partial exemption for the portion of the building occupied by the local charities. The record revealed that 41.7% of the building was in use by the local charities, while the majority of the building, 58.3%, was rented to the commercial businesses. After reviewing Hotel Dieu and the 1973 Convention transcripts, the appellate court espoused its belief that “the drafters believed that if for any reason the exemption was found not to apply, it was not to apply to the property in its entirety, not proportionately.” Johnson, 00-2772 at p. 7, 812 So.2d at 745. We state the proposition in Johnson differently: if for any reason the exemption was found to apply, it was to apply to the entire property. The Johnson court ultimately concluded “that a partial exemption from ad valorem taxation, applied proportionately, is not provided for by La. Const. Art. VII § 21(B).” Id.

The issue addressed in Tulane was whether two vacant, undeveloped lots inherited by the Board of Administrators of the Tulane Education Fund were exempt from ad valorem property taxes. In its discussion, the Tulane Court cited to an excerpted quote from the 1973 Convention found in a footnote of Hotel Dieu I to reach the conclusion that “the discussions demonstrate[d] only the delegates’ intent to limit a non-profit entity's ability to engage in business activity in competition with for-profit enterprises.” Tulane, 97-0663 at p. 5, 701 So.2d at 705 (emphasis in original) (citing Hotel Dieu I, 403 So.2d at 1257-58 n. 1). The Assessor uses this inference to argue that the Hotel demonstrates that it has a for-profit motive by competing with other hotels in the area when it markets itself to the general public as a place to get married, hold meetings, stay, socialize, dine, and drink. He then reaches his own supposition that the drafters of the 1974 Constitution intended to prohibit this activity. This is a misreading of Tulane. In examining the quoted conclusion above, it is notable that the Tulane Court found that the drafters intended to limit, not eliminate, a non-profit entity's ability to engage in a competitive business activity.

Upon a closer re-examination of the Convention transcript, the quoted delegate, Mr. Lowe, explains his concern in this manner:

Mr. Lowe: Now, the second concern was that we have tax-exempt organizations that are competing with free enterprise. In 1969 the federal government recognized this, and they took care of that particular problem ․ So, it's absolutely necessary that we say “unrelated to the exempt purpose for which the corporation or association is organized.” [18]

The U.S. Fifth Circuit Court of Appeals addressed this issue in La. Credit Union League v. U.S. when it was called upon to apply 26 USC § 513—entitled Unrelated trade or business—to determine whether a non-profit entity was exempt from federal business income taxes. The appellate court opined:

As we have noted, the plain language of section 513 dictates that any activity carried on for the production of income constitutes a trade or business. Although the legislative history speaks of competition, those who actually drafted the statute avoided the word as if it were the plague. The statute nowhere requires or even suggests that the presence or absence of competition is a factor to be considered in connection with the unrelated business income tax. The statute is formulated in terms that do not seek directly to prevent unfair competition, but rather to extract the same revenue from businesses operated by exempt organizations as that levied upon similar businesses operated by nonexempt entities.

693 F.2d 525, 541 (5th Cir. 1982). In fact, the court found that the applicable laws “establish a conclusive presumption that the conduct of a trade or business by an exempt organization constitutes unfair competition against taxable entities engaged in similar activities.” Id. at 542. Therefore, “the critical question under the statute is not the question of unfair competition, but whether the activity constitutes an unrelated ‘trade or business.’ ” Id. (quoting Clarence LaBelle Post No. 217 v. United States, 580 F.2d 270, 275 (8th Cir. 1978) (Lay, J., concurring)). This led the court to surmise “that the presence or absence of competition between exempt and nonexempt organizations does not determine whether an unrelated trade or business is to be taxed.” Id.¹⁹

Finally, the Assessor cites to Sherwood to establish that exemptions are to be strictly construed against the taxpayer, and that the taxpayer bears the burden of proving clearly, unequivocally and affirmatively that it is entitled to the exemption. Sherwood, 08-0194, p. 7, 998 So.2d at 61. And further, that “[t]he taxpayer's stringent burden is to overcome the judicial maxim that to doubt is to deny the exemption.” Id. While that premise is true, as the Theatre points out, the issue before the Sherwood court was whether a country club qualified as a fraternal organization within the meaning of La. Const. Art. VII § 21(B)(1)(a)(i). There is no dispute here amongst the parties that the Theatre or the Museum qualify as nonprofit corporations operating for educational purposes.

The Assessor then directs our attention to an assortment of Private Letter Rulings and Technical Advice Memoranda issued by the IRS. According to the IRS website, “Private letter rulings (PLRs), technical advice memoranda (TAMs) and field service advice memoranda (FSAs) are taxpayer-specific rulings furnished by the IRS National Office in response to requests made by taxpayers and/or [IRS] officials.”  ²⁰ We find those documents to be inapposite for a few reasons. First, none of the cited rulings are specific to the Theatre or the Museum. Next, those rulings all involve determinations of whether the entities under review are subject to federal income tax—not ad valorem property taxes. More importantly, the IRS website cautions that “[i]t is important to note that, pursuant to 26 USC 6110(k)(3), such items cannot be used or cited as precedent.”²¹ 26 USC 6110(k)(3), found within the Internal Revenue Code and entitled “Public inspection of written determinations,” provides:

Precedential status.--Unless the Secretary otherwise establishes by regulations, a written determination may not be used or cited as precedent. The preceding sentence shall not apply to change the precedential status (if any) of written determinations with regard to taxes imposed by subtitle D of this title.

Accordingly, we decline to discuss any of those rulings.

CONCLUSION

Having found that Hotel Dieu II is controlling under the specific facts presented to us in this case, we find that the BTA correctly interpreted and applied La. Const. art. VII, § 21(B).

DECREE

For the foregoing reasons, we affirm the Board of Tax Appeals May 12, 2025 judgment and find that the Theatre is exempt from ad valorem taxes for the 2022 tax year.

AFFIRMED

I concur with the majority and write separately to emphasize that portion of the majority's opinion that this decision is limited to this set of facts and the tax years affected by this appeal only. This decision is an attempt to harmonize existing jurisprudence, a unique fact setting, the meaning of an ambiguous constitutional provision, and the mandate delivered to us in the remand from our Supreme Court.

The majority's very thorough review of the discussions in the Louisiana Constitutional Convention of 1973 and the jurisprudence that attempts to divine the true intent of La. Const. art. VII, § 21(B) points out the lack of clarity in this body of law. In an effort to clarify the law for assessors and charitable organizations, I would suggest a different test for determining the exemption from ad valorem taxation than existing jurisprudence provides.

The unique proposition presented by the Higgins Hotel is a building, devoted to a commercial enterprise (food and lodging), that is wholly owned by a 501(c)(3) organization. There is no doubt that the building provides a revenue source and a convenience that supports the mission of the WWII Museum. The hotel gives discounts for museum functions and allows the free use of the conference room. However, it is impossible for any review of this case to ignore the fact that the hotel is a commercial enterprise that is in competition with other similarly situated businesses that do pay the same taxes for which this hotel seeks an exemption.

It is fair to take judicial cognizance of the fact that museums do not typically own hotels. In fact, one would be hard pressed to name another museum that owns a hotel essentially attached to it. Typical museum commercial activity is limited to gift shops and limited food service. From this it is also fair to reason that a museum, even the WWII museum, can operate effectively without a hotel.

The facts of this case differ significantly from those presented in Hotel Dieu v. Williams, 403 So.2d 1255 (La. App. 4 Cir. 8/31/81) aff'd 410 So.2d 1111 (La. 1982) but that difference can be useful in opening a clearer path moving forward. The commercial uses in Hotel Dieu are all uses that are customary and, in some cases, necessary to the mission of the hospital. Doctors who have hospital privileges need office space. Doctors, patients, family members, and other hospital users must have a place to park automobiles in the modern age. In fact, in an urban setting, even charitable institutions must comply with zoning and land use ordinances that require adequate parking. Similarly, it is not only customary for a hospital to have a cafeteria, almost all full-service hospitals have some sort of food service to allow hospital workers and other hospital users to eat during brief intervals permitted in their workday and other duties.

Such is not the case with a hotel devoted to the mission of a museum.

The constitution does not speak to a discount in the amount of taxes or division of tax exempt and non-exempt uses. That is a shortcoming in drafting because the convention discussion certainly envisions that the lack of a mixed-use exemption would become problematic. The majority opinion astutely shows that in the convention history presented. A review of the “chatter” evidenced by the discussion shows that every speaker seemed to agree that some related and customary commercial use of exempt property would not deprive the tax-exempt property of its exemption. This hotel is, from foundation to roof, a commercial enterprise that allows special privileges to a related tax-exempt enterprise. This usage flips the tax exemption on its head.

I would suggest that a better test for determining whether a property is exempt for charitable or educational reasons would rely on an analysis of the commercial usage against what is related, proportionate, and customary to the type of charitable enterprise at issue. A café in a museum should not deprive it of a tax exemption. A café that takes up 90 percent of the square footage of a “museum” should eliminate the exemption.

At this point in the jurisprudential evolution of the law, we should admit that there has never been an “all or nothing” analysis in this body of law. The majority opinion's comments regarding Hotel Dieu and Johnson v. New Orleans Charities Bldg. Corp., 00-2772 (La. App. 1 Cir. 2/15/02), 812 So.2d 741 acknowledge that. In both instances, partial commercial uses confounded the courts. In both cases, the courts reached a decision that makes common sense then seem to reverse-engineer their decisions by finding bits and pieces of legal argument to support the preferred outcome.

An easier and cleaner approach is to acknowledge that mixed charitable and commercial use properties do exist and they are quite common. In order to achieve fairness and justice, we should follow the general discussions of the constitutional convention and use that as the “intent” of the drafters instead of focusing on one comment or another that was recorded in those discussions. By doing so, a simple, easy-to-follow rule should develop itself: an ancillary commercial use of a tax-exempt property that is typical, proportional, related, and customary or legally required does not deprive the property of tax-exempt status. When the commercial use drives the management and operation of the property it should not be tax exempt.

While this suggested test does not give precise proportions, it has the attractive quality of giving developers and charitable organizations some guidance in planning and it gives courts the ability to review these cases by criteria that give voice to common sense. I would not expect a similar outcome for this hotel in the future under such a test.

FOOTNOTES

1.   Louisiana Revised Statutes article 33:2828(D), which was later repealed by Acts 2024, No. 422, § 1, effective August 1, 2024, provided at the time the Theatre filed its Petition:D. Each assessor shall evaluate and grant or deny the request for tax exemption, or grant a partial tax exemption based on the assessed value of that proportion of the property not being used for an exempt purpose, by the first day of August of each year which shall determine the liability for or exemption from taxation for the calendar year. Each determination by the assessor shall be subject to review as provided by law.

2.   World War II Theatre, Inc. v. White, 26-00295 (La. 6/2/26), ––– So.3d ––––, 2026 WL 1584296. The majority was comprised of Justices pro tempore Penzato, Vaughn and Zeno and Justice McCallum. Justices Hughes, Griffin and Guidry dissented, while Chief Justice Weimer and Justice Cole recused from the matter.

3.   For a more complete factual and procedural background, see World War II 2.0.

4.   Johnson will be discussed more fully, infra.

5.   Louisiana Constitution Article VII, § 21 will be more fully discussed, infra.

6.   Found in the Internal Revenue Code at 26 USCA § 501, the statute defines, in part, entities that are exempt from Federal income taxes as “[c]orporations ․ organized and operated exclusively for ․ educational purposes ․ no part of the net earnings of which inures to the benefit of any private shareholder or individual ․”

7.   La. R.S. 47:21349 (C)(1)-(2) provides,(1) A person resisting the payment of an amount of ad valorem tax due or the enforcement of a provision of the ad valorem tax law and thereby intending to maintain a legality challenge shall timely pay the disputed amount due under protest to the officer or officers designated by law for the collection of the tax and shall give such officer or officers, notice at the time of payment of his intention to file suit for the recovery of the protested tax. The portion of the taxes that is paid by the taxpayer to the collecting officer or officers that is neither in dispute nor the subject of a suit contesting the legality of the assessment shall not be made subject to the protest. The taxpayer shall submit separate payments for the disputed amount of tax due and the amount that is not in dispute and not subject to the protest. Upon receipt of a notice, the protested amount shall be segregated and held by the collecting officer for a period of thirty days.(2) A legality challenge suit must be filed within thirty days from the date of the protested payment. If a suit is timely filed contesting the legality of the tax or the enforcement of a provision of the tax law and seeking recovery of the tax, then that portion of the taxes paid that are in dispute shall be further deemed as paid under protest, and that amount shall be segregated and shall be further held pending the outcome of the suit. The portion of the taxes that is paid by the taxpayer to the collecting officer or officers that is neither in dispute nor the subject of a suit contesting the legality of the tax shall not be made subject to the protest.

8.   Specifically, the Assessor asserts:A. The BTA erred by failing to correctly interpret and apply the legal test to determine whether a property is exempt from ad valorem tax pursuant to La. Const. art. VII, § 21(B).B. The BTA erred in its interpretation and application of La. Const. art. VII, § 21(B), because it interpreted and applied [the] constitutional test to grant an ad valorem tax exemption upon a finding that a “majority” of the commercial uses or operations are not unrelated to the exempt purpose of the property owner, rather than the strict requirement set forth in the constitution, as interpreted by the Courts and expressly set forth by the constitutional drafters, which only grants the exemption to a property if “none” of the commercial uses or operations are unrelated to the exempt purpose of the property owner.C. The BTA erred by interpreting and applying La. Const. art. VII, § 21(B) in direct conflict with the express intentions of the drafters of constitutional test.D. The BTA erred in its application of the legal standards and burden of proof on Theatre, Inc. in this case, which is the strict construction legal standard and heightened burden of proof applicable in all tax exemption cases.E. The BTA erred in ruling that the Hotel met the exemption test under La. Const. art. VII, § 21(B) and qualified for an ad valorem tax exemption.

9.   Louisiana Revised Statutes 47:1435 establishes:A. Except as provided in Article V, Section 5(D) of the Constitution of Louisiana, the courts of appeal shall have exclusive jurisdiction to review the decisions or judgments of the board, and the judgment of any such court shall be subject to further review in accordance with the law relating to civil matters.B. The court of appeal where a case would be appealable pursuant to R.S. 47:1436 may exercise supervisory jurisdiction over the case pending before the board in the same manner as provided for in a civil matter pending in a district court within its circuit. The supreme court may exercise supervisory jurisdiction over the board in all of its cases, in the same manner as provided for in civil matters.C. Upon such review, the courts shall have the power to affirm or, if the decision or judgment of the board is not in accordance with law or is manifestly erroneous on the facts considering the record as a whole, to modify, or to reverse the decision or judgment of the board, with or without remanding the case for further proceedings.D. If a judgment of the board is to be modified or reversed and one court of appeal judge dissents, the case shall be reargued before a panel of at least five judges prior to rendition of judgment, and a majority shall concur to render judgment.

11.   Although no substantive changes were made, this section was amended by Acts 2023, No. 48, § 1, with an effective date of November 20, 2023, and now provides in its current form:(B)(1)(a)(i) Property owned by a nonprofit corporation or association organized and operated exclusively for religious, dedicated places of burial, charitable, health, welfare, fraternal, or educational purposes, no part of the net earnings of which inure to the benefit of any private shareholder or member thereof and that is declared to be exempt from federal or state income tax; and* * *(4)(a) None of the property listed in this Paragraph shall be exempt if owned, operated, leased, or used for commercial purposes unrelated to the exempt purposes of the corporation or association.

12.   See the Official Journal, p. 1450 at https://house.louisiana.gov/cc73/PDFs/volume% 202.pdf.

13.   The transcripts can be found on the Louisiana House of Representatives website, located at https://house.louisiana.gov/cc73/PDFs/volume% 208.pdf. For the convention delegates’ discussion related to La. Const. Art. VII, § 21, see pp. 1914, 2021-2029. We note that the Assessor entered into evidence a portion of the delegates’ discussion, including two pages that are illegible—as they appear on the House of Representatives’ website. Pursuant to LSA-Const. 1972 Conv. § 9-A(D), this Court viewed those pages in the official bound copy of the transcript held by the Law Library of Louisiana.

14.   Although Mr. Comar was a co-author of this section, he explained that he had not helped draft this language—it had come from a previous amendment proposed by another delegate.

15.   See also the discussion in P. Raymond Lamonica & Jerry G. Jones, Witness testimony regarding “legislative intent”—beyond text, Louisiana Legislative Law and Procedure Handbook § 7:11. It provides, in part:Statements during contemporaneous legislative proceedings. As the court in Mexic noted, a statement “expressed to the appropriate legislative committees and both houses is admissible as an aid to the courts in determining the true legislative intent. Here, it is the expression of both the intent and purpose of the legislation to the legislature that aids the court in its constitutional function of interpretation”[ ].But even when contemporaneous during the enactment process, statements by legislators and non-legislators recorded in appropriate legislative history materials should not be regarded as conclusive indicia of legislative intent or purpose. To do so denies the court its judicial authority and obligation to a principled statutory interpretation process. Instead, such approach substitutes as controlling the words of a few instead of the intent of the entire body as shown by the complete enactment record, including, most importantly, the text of the statute voted on by the entire legislative bodies of both houses and acted upon by the governor (or in the case of a constitutional amendment, the electorate).(citations omitted) (emphasis in original).

16.   For a detailed outline of the underlying facts, see Hotel Dieu I, 403 So.2d at 1257.

17.   Similarly, although our Supreme Court denied writs in this case (06-2828 (La. 2/2/07), 948 So.2d 1080), that Court has consistently held that “[a] writ denial by this Court has no precedential value.” Estate of Viola Guillory, 23-00463, p. 1 (La. 9/26/23), 370 So.3d 721, 722 (Mem) (McCallum, J., concurring) (quoting St. Tammany Manor, Inc. v. Spartan Bldg. Corp., 509 So.2d 424, 428 (La. 1987)). See also Bella v. Knieper, 24-01563, p. 1 (La. 4/8/25), 405 So.3d 575 (Mem) (Griffin, J., would grant and assigns reasons).

18.   Presumably, Mr. Lowe was referring the amendment of § 513 via Tax Reform Act of 1969, Pub.L. No. 91–172, 83 Stat. 541. See La. Credit Union League v. U.S., 693 F.2d 525, 533 (5th Cir. 1982) (where the court noted that, prior to the amendment, defining “trade or business” was problematic for the courts and that “the Code provided no helpful explanation”).

19.   We note that under both federal and state income tax laws, any unrelated business income that exceeds $1000 in a tax year is subject to income tax. See https://www.irs.gov/charities-nonprofits/unrelated-business-income-tax. See also La. R.S. 47:287.501(A), which provides:General rule. An organization described in I.R.C. Sections 401(a) or 501 shall be exempt from income taxation under this Part to the extent such organization is exempt from income taxation at federal law, unless the contrary is expressly provided.

20.   https://www.irs.gov/tax-exempt-bonds/private-letter-rulings-technical-advice-memoranda-and-field-service-advice-memoranda-involving-tax-exempt-bond-issues

21.   Id.

Judge Paula A. Brown