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3. CHTOP is anon-profit corporation and is tax exempt under 501(c) (3) of the Internal
<br />Revenue Code, from federal Income taxes.
<br />4. CHTOP's Application for Property Tax Exemption states that the taxpayer claims that, as
<br />an educational organization, its property is exempted for ad valorem taxes under N.C.
<br />Gen Stat. 105-278.7.
<br />Under N.C. Gen. Stat. 105-278.7, buildings, the land they actually occupy, and additional
<br />adjacent land necessary for the convenient use of any such building shall be exempted from
<br />taxation if wholly owned by a charitable, historical, veterans, scientific, literary, benevolent,
<br />or nonprofit community or neighborhood organization, if the land is "wholly and exclusively
<br />used" by its owner for educational purpose as "one that has as its objective the education or
<br />instruction of human beings, [which] comprehends the transmission of information and the
<br />training and development of the knowledge or skills of individual persons." Charitable is
<br />defined in the statute as "one that has humane and philanthropic objectives [and] is an
<br />activity that benefits humanity or a significant rather then limited segment of the community
<br />without expectation of pecuniary benefit or reward."
<br />According to its Articles of Incorporation, CHTOP is "organized exclusively for charitable,
<br />religious, educational, and scientific purposes" to qualify it under Section 501 (c) (3) of the
<br />Internal Revenue Code. An organization is not deemed to be a charitable organization for
<br />purposes of determining its eligibility for an exemption from property taxes merely because it
<br />enjoys non-profit status for income tax purposes. See appeal of Chapel Hill Residential
<br />Retirement Center, Inc., 60 N.C. App. 294, 299 S.E.2d 782 (1983).
<br />The Internet website of CHTOP (www.chtop.com) indicates that, besides its Head Start
<br />Programs, the organization operates or supports a number of other projects, offers a
<br />number of services, and develops and sells a number of products, such as the following:
<br />1. Programs and services related to day care and respite care services for children, the
<br />disabled and the elderly;
<br />2. Family support programs;
<br />3. "Outreach" services under contract on a national and international scale including
<br />training, media development, demonstration, technical assistance, and public
<br />awareness; and
<br />4. Products for sale related to learning and infant preschool play assessments, early
<br />childhood, curriculum planning, disability, head start, respite and family support,
<br />volunteer support; and related media products.
<br />The website suggests that, although CHTOP is partially funded by Head Start funds, and other
<br />funding sources that are possibly public in nature, it is substantially supported by the above-
<br />described product sales at retail prices. For example, certain 15-minute video transfers are
<br />being sold for sixty-five dollars and there are assessment kits that are sold for nearly a
<br />thousand dollars each. The products may be ordered from CHTOP directly and are, according
<br />to the ordering instructions, to include North Carolina sales tax for State residents. These facts
<br />are suggestive of an enterprise which, although operating anon-profit, is, arguably, not
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