Affordable housing nonprofit qualifies for charitable tax exemption, Tax Court says

A Columbus-based affordable housing nonprofit qualifies for charitable purposes exemptions for several years of its operation, the Indiana Tax Court ruled on Monday, rejecting arguments posed by the Bartholomew County assessor.

Housing Partnerships, Inc., a not-for-profit that provides affordable housing and home rehabilitation services in their community, encountered pushback when it applied for property tax exemptions on several of its buildings.

Specifically, the applications claimed that all or a portion of the properties, along with the personal property in the office building, were entitled to the charitable purposes exemption because the properties were used to provide housing to low-income individuals and families. But the Bartholomew County Property Tax Assessment Board of Appeals denied the applications.

Housing Partnerships brought before the Indiana Board of Tax Review several petitions for review of properties during the 2008, 2010, 2012, 2014 and 2016 tax years. While the call was close, the Indiana Board ultimately ruled for Housing Partnerships, finding the totality of the evidence demonstrated it owned, occupied, and used its properties exclusively for charitable purposes during the years at issue.

The Indiana Tax Court, not persuaded by the assessor’s arguments on appeal, affirmed the Indiana Board’s final determination in a Monday decision, first finding that the assessor’s arguments merely invited the Tax Court to ignore the Indiana Board’s role as trier of fact and reweigh the evidence.

It also rejected the assessor’s second point, noting that there is no specific evidentiary formula to be followed in qualifying for a charitable purposes exemption.

This Court has repeatedly explained that because exemption cases stand on their own facts and, ultimately, on how the parties present those facts, determining whether property is owned, occupied, and used for charitable purposes requires undertaking a fact sensitive inquiry that is not susceptible to bright-line tests or abbreviated inquiries,” Judge Martha Wentworth wrote for the Tax Court. “Thus, to the extent that the Assessor believed certain evidence for making comparisons and identifying disparities was essential to the Indiana Board’s determination, the Assessor — not Housing Partnerships — was responsible for getting that information into the administrative record.”

Lastly, the Tax Court declined to agree with the assessor’s urging that it reject Housing Partnerships’ claim for exemption just as it did in Housing P’ships, Inc. v. Owens (HPI I), 10 N.E.3d 1057 (Ind. Tax Ct. 2014). Rather, the Tax Court pointed out that the parties’ evidentiary presentations to the Indiana Board in HPI I differed from those in the present case.

“The Indiana Board weighed the competing evidence, and while noting it was a

‘close call,’ concluded that Housing Partnerships’ good deeds provided a public benefit sufficient to justify the loss of tax revenue by lessening the government’s burden to provide low income housing. The Indiana Board’s determination comports with the evidence and reflects the principle that a taxpayer does not need to show that it completely relieves the government’s obligations to qualify for a charitable purposes exemption,” the Tax Court wrote.

Despite its affirmation of the Indiana Board’s final determination in the case of Bartholomew County Assessor v. Housing Partnerships, Inc., 18T-TA-21, the Tax Court remanded the matter to the Indiana Board to determine which of Housing Partnerships’ properties were at issue during the 2016 tax year.

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