A local fraternity at UTM no longer has to pay $12,000 dollars worth of property taxes according to a ruling issued by the chancery court of Weakley County.

The judgment was filed on August 21 stating the case was against the State of Tennessee Board of Equalization, Weakley County Tenn., and the Weakley County Assessor of property.

The purpose of this suit was to see whether or not Alpha Gamma Rho/Martin Building Corporation (AGR) is entitled to have is real property exempted from taxation pursuant to Tenn. Code Ann. 67-5-212(h). The case was heard on July 14, 2003 on the administrative record and statements of counsel.

According to the judgment, AGR is a "nonprofit corporation that is exempt from federal income taxation." The judgment also reads that AGR is "a professional fraternity openly only to men pursuing collegiate courses in agriculture or related subjects."

The property discussed in the judgment was the AGR fraternity house at UTM, located on 225 University Street, Martin, Tenn.

Despite the recent ruling in the chancery court, AGR has been denied a request for exemption several times. In 1998, the staff attorney for the State Board denied an application of exempt from taxes on April 30, 1999. AGR was denied complete exemption once more before the Administrative Law Judge (ALJ) on October 19, 1999. The initial decision of the ALJ found AGR was a fraternal organization exempt from federal income taxation but determined it did not meet the test of education activities and denied the application for exemption. A third denial was issued on December 23, 1999 when the fraternity requested reconsideration.

The statue relevant to this case is found in Tenn. Code Ann. 67-5-212(h) which states that, "There shall be exempt from property taxation the property or any part thereof fraternal organizations exempted from the payment of feral income taxes by the United States Internal Revenue Code to the extent that such property is used not for revenue reducing profit, but directly, physically and exclusively for religious, charitable, scientific and educational activities."

Both the ALJ and the commission found AGR did not meet the "educational activities" requirement of the Tennessee Code. However, a leading case on this issue is City of Memphis v. Alpha Beta Welfare Association. In Alpha Beta, the Phi Chi Medical Fraternity applied for exemption from property taxation. The trial court, Court of Appeals and the Tennessee Supreme court held the fraternity was entitled to property tax exemption.

In the present case with AGR, fraternity co-founder and advisor, Dr. Bobby Duck testified that no classroom instruction too place in the chapter but that an "awful amount of learning" took place. He noted that career training "runs through everything we do." Annual leadership workshops were also shown to have taken place in which the alumni expound on their respective agricultural related vocations.

According to the judgment, AGR also provides a "student tutorial program" for new members to assist them with homework assignments. If a member's grade point average falls below a 2.25, he is required to maintain mandatory study hours each week usually monitored by a fraternity officer.

The chancery court ruled that AGR exhibits more than expected by a college social fraternity. According to their judgment, AGR has an informally structured "system of education" similar to that found in the Alpha Beta case and is entitled to exemption from property taxation.

Other fraternities on the UTM campus still have to pay property taxes as assessed.