ILNews

Apartment creates issue of first impression

Back to TopE-mailPrintBookmark and Share

In an issue of first impression, the Indiana Tax Court decided housing owned by a non-profit that receives governmental subsidies to rent to low- and moderate-income people at below-market rates is not property used for a charitable purpose.

At issue in Jamestown Homes of Mishawaka, Inc. v. St. Joseph County Assessor,  No. 49T10-0802-TA-17, is whether the Indiana Board of Tax Review erred in denying Jamestown Homes a property tax exemption for the 2005 tax year by ruling Jamestown's apartment complex didn't qualify for the charitable purposes exemption provided in Indiana Code Section 6-1.1-10-16.

Jamestown is a non-profit corporation formed in 1965 to provide housing based on Section 221(d)(3) of Title II of the National Housing Act. Under the program, the federal government insured and subsidized low-interest loans to private developers that agreed to rent to people at certain income levels and charge rents that would cover operating costs and debt service only. Jamestown was also allowed to evict tenants who don't pay rent and charge late fees and security deposits.

The apartments were built in 1970, but Jamestown didn't apply for the property tax exemption until the 2005 tax year. The St. Joseph County Property Tax Assessment Board of Appeals denied the application; the Indiana Board of Tax Review affirmed. The board found Jamestown's apartments weren't rented to low- and moderate-income people for any kind of charitable purpose but because it was a condition of its agreement with the federal government. It also ruled the government was shouldering the financial burden of providing the low-cost housing.

On appeal, Jamestown argued it met the burden of proving its property is entitled to the tax exemption, saying it performed a service that the federal, state, and local government would have an obligation to do if it weren't for Jamestown. It also provides affordable housing with no expectation of financial gain.

Because this is an issue of first impression in Indiana, Judge Thomas Fisher looked to other courts for their rulings and adopted the reasoning provided in the New Mexico case Mountain View Homes, Inc. v. State Tax Commission, 427 P.2d 13 (N.M. 1967). That case was based on a similar situation and exemption provision as in the instant case.

Using the ruling from Mountain View, the Indiana Tax Court affirmed the Indiana Tax Review Board's final decision. There's no evidence any welfare clients live in Jamestown's apartments nor is there evidence tenants can continue to live there when they can't pay their rent, wrote Judge Fisher. There's no evidence Jamestown provided good fellowship intended to improve the spirits of its tenants nor is there evidence showing Jamestown has lessened the burden of government in meeting the need for affordable housing. That need is ultimately being met by the government through its mortgage insurance and interest subsidy, wrote the judge.

ADVERTISEMENT

Sponsored by

facebook - twitter on Facebook & Twitter

Indiana State Bar Association

Indianapolis Bar Association

Evansville Bar Association

Allen County Bar Association

Indiana Lawyer on Facebook

facebook
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. Oh my lordy Therapist Oniha of the winexbackspell@gmail.com I GOT Briggs BACK. Im so excited, It only took 2days for him to come home. bless divinity and bless god. i must be dreaming as i never thoughts he would be back to me after all this time. I am so much shock and just cant believe my eyes. thank you thank you thank you from the bottom of my heart,he always kiss and hug me now at all times,am so happy my heart is back to me with your help Therapist Oniha.

  2. Hail to our Constitutional Law Expert in the Executive Office! “What you’re not paying attention to is the fact that I just took an action to change the law,” Obama said.

  3. What is this, the Ind Supreme Court thinking that there is a separation of powers and limited enumerated powers as delegated by a dusty old document? Such eighteen century thinking, so rare and unwanted by the elites in this modern age. Dictate to us, dictate over us, the massess are chanting! George Soros agrees. Time to change with times Ind Supreme Court, says all President Snows. Rule by executive decree is the new black.

  4. I made the same argument before a commission of the Indiana Supreme Court and then to the fedeal district and federal appellate courts. Fell flat. So very glad to read that some judges still beleive that evidentiary foundations matter.

  5. KUDOS to the Indiana Supreme Court for realizing that some bureacracies need to go to the stake. Recall what RWR said: "No government ever voluntarily reduces itself in size. Government programs, once launched, never disappear. Actually, a government bureau is the nearest thing to eternal life we'll ever see on this earth!" NOW ... what next to this rare and inspiring chopping block? Well, the Commission on Gender and Race (but not religion!?!) is way overdue. And some other Board's could be cut with a positive for State and the reputation of the Indiana judiciary.

ADVERTISEMENT