Tax Court remands denial of pro-life ministry’s exemption

The Indiana Board of Tax Review must reconsider a South Bend pro-life ministry’s appeal of the denial of a tax exemption after the Indiana Tax Court ruled Tuesday the board erred by dismissing the appeal sua sponte.

In May 2013, Flowers for Heaven, Inc., a pro-life ministry based in South Bend, filed for a charitable tax exemption on its personal property and the land and improvements where it operated. The St. Joseph County Property Tax Assessment Board of Appeals granted the exemption for the personal property, but denied it for the real property. On its denial form, the board listed “Lake County Trust Company, Trust No. 6 (Flowers for Heaven)” as the property owner, then wrote it had denied the exemption because the real property was not in the name of Flowers for Heaven, Inc.

The trust then filed for correction of an error, claiming that it was “just a holding conduit for (Flowers)” and that Flowers had exclusive use of the property. But the St. Joseph County board denied that motion as well, finding that the trust should have filed a petition for review with the Indiana Board of Tax Review when it received the initial denial.

The trust then filed an appeal with the Indiana Board, but the board dismissed the appeal sua sponte, stating the appeal “impermissibly challenged the (St. Joseph County board’s) rationale for denying the … exemption application and failed to assert correctable errors of omission.” The trust sought rehearing, claiming the objective error in its appeal was that the county board denied the exemption to the wrong entity.

The state board denied rehearing, prompting the trust to appeal in Lake County Trust Co., Trust No. 6, (Flowers from Heaven, Inc.) v. St. Joseph County Assessor, 02T10-1604-TA-10, and the Indiana Tax Court reversed the dismissal of the appeal in a Tuesday opinion.

In her opinion, Tax Court Judge Martha Blood Wentworth wrote that 52 Indiana Administrative Code 2-10-2 “expresses an absolute that a motion must precede” an order of dismissal. Because no such motion was filed here, Wentworth said the dismissal must be reversed.

Further, “listing the name of a different entity as the property owner on the Form 120 exemption denial rather than that listed on the Form 136 is an objective error susceptible to correction using a Form 133,” the same form the trust used to file its appeal, Wentworth said.

Regardless, a question remains as to whether correcting the name on the initial denial form would automatically qualify Flowers for its charitable real property exemption, Wentworth continued. The case record “contains conflicting evidence regarding which entity owns the real property for purposes of Indiana Code section 6-1.1-10-16,” she said, so she remanded the case for the Indiana board to identify Flowers as the entity requesting exemption and to determine whether it is entitled to that exemption.  

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