In 1982, King County and the Washington Department of Revenue (WDOR) sought to assess personal property taxes against The Monastery, arguing that The Monastery was not a legitimate church. George Freeman and The Monastery fought back and appealed this tax assessment to the State Board of Tax Appeals, which ruled The Monastery was entitled to a partial exemption.
Mr. Freeman asserted that The Monastery was a congregation of the California-based Universal Life Church, and was therefore entitled to a religious tax exemption. In 1974, the Universal Life Church had sued the IRS, resulting in a federal court ruling that the church was entitled to a religious tax exemption. Further, the WDOR itself had acknowledged that The Monastery was a recognized church when it abandoned attempts to assess business and occupation tax against The Monastery in 1979.
Mr. Freeman testified that he was an ordained chaplain of the church in 1979, and that the entire Monastery building was used for services, a rectory, administrative offices, and sheltering the homeless. California representatives of the Universal Life Church testified that collecting tithes at the door where services occurred was consistent with their normal practices.
In its opposition, Washington State threw the kitchen sink at the Monastery introducing legal proceedings and further investigations. The state relied extensively on uncorroborated testimony from an undercover police officer to support its argument that the property was not used for religious purposes. Notably, the state utilized an undercover policeman who had previously worked as a weekend disc jockey at The Monastery.
The officer—gratuitously identified as a vice cop—offered irrelevant and prejudicial allegations of drug sales, with no evidence that The Monastery was aware of, or condoned, these activities. The Board also credited testimony from the police officer that unidentified persons had allegedly offered to rent him The Monastery for parties and that the church charged admission to its services, which the State characterized as disco dance parties. Suspiciously, the State seemed to overstate its position on tax enforcement efforts with this case as being unrelated to homophobia.
After considering this evidence, the Board of Tax Appeals ruled that The Monastery was a congregation of a recognized church and was entitled to assert a religious tax exemption. However, the Board then ruled that The Monastery could not claim this exemption for all the property in dispute. Although the Board went to great pains to claim that the use of the property by homeless and gay youth did not affect its decision, the order contained certain points of emphasis that belie these claims of impartiality.
In the Board’s oddly-phrased judgement , certain activities did not “did not smack of that nature of what a church is about” or “a church purports to be.” Applying this narrow view of church services, the Board ruled the musical speakers and amplification equipment were not used “wholly for religious purposes” and the “dance floor” was subject to personal property taxes. However, even the Board acknowledged that the portions of The Monastery devoted to sheltering homeless youths and Mr. Freeman’s private residence were exempt from personal property taxes, and directed the WDOR to allocate the disputed property taxes between these exempt and nonexempt uses.