41. The Petitioner is a single
member not-for-profit Indiana limited liability company, whose sole member, LifeCare,
is also a 501(c)(3) not-for-profit organization. The grant of a federal or
state income tax exemption, however, does not entitle a taxpayer to a property tax
exemption because an income tax exemption does not depend so much on how property
is used, but on how money is spent. See Raintree Friends Hous., Inc.,
667 N.E.2d 810,813 (Ind. Tax Ct.1996) (non-profit status does not automatically
entitle a taxpayer to tax exemption). Thus, the Board must look at the use of
the subject property to determine whether the property is entitled to a full
exemption.
42. According to Ms. Hamaker,
Sanders Glen’s mission is “to foster individuality in residents and employees
and to promote dignity and quality of life through our efforts to provide exceptional
care to those we serve.” Further, Ms. Hamaker indicated that the use of the subject
property “shall operate in accordance with the same purposes as LifeCare” whose
purpose is “providing health care or other services to the elderly and infirm
or disabled and/or disadvantaged persons.” Hamaker
testimony; Pet’r Brief; Pet’r Ex. 5, 6, 14.
43. Caring for the aged is a
recognized benefit to the community at large and to society as a whole. Raintree
Friends Hous., Inc., 667 N.E.2d at 816 (Ind. Tax Ct.1996). Facilities that
care for the aged qualify as “charitable” because they provide the relief of
loneliness, boredom, decent housing that has safety and convenience and is
adapted to their age, security, well-being, emotional stability, [and]
attention to problems of health. St. Bd. of Tax Comm’rs v. Methodist Home for the Aged, 241 N.E.2d at 86
(Ind. Ct. App. 1968). In Wittenberg, the Tax Court again stated that a
charitable purpose is accomplished by meeting the needs of the aging. Wittenberg
Lutheran Village Endowment Corp. v. Lake County Property Tax Assessment Bd. of
Appeals, 782 N.E.2d at 488-89 (Ind. Tax Ct. 2003). The record contains a
great deal of evidence that these are exactly the kinds of things that Sanders
Glen provides.
44. Indiana Code § 6-1.1-10-16
requires that the property be owned, occupied and used for the charitable
purpose. Sanders Glen is owned by American Eagle Sanders Glen LLC, an Indiana
non-profit organization with the purpose of operating an assisted living
facility and providing health services to the elderly. Sanders Glen is occupied
by residents who are “elderly and infirm or disabled and/or disadvantaged.”
Sanders Glen is used as an assisted living facility. Sanders Glen is charging a
below market rent to its residents, and if the residents are not able to keep
up with the rent the staff will find alternative ways to keep the residents at
Sanders Glen. No resident has ever been evicted from Sanders Glen for the
inability to pay their rent. Sanders Glen offers daily activities to keep the residents
engaged and Sanders Glen has even “donated” part of its own property to the city
of Westfield to encourage more citizens to interact with the residents of Sanders
Glen. Sanders Glen uses common areas and activities and longstanding
relationships with outside organizations to foster the “sense of community and
involvement.” Wittenberg, 782 N.E.2d at 488 (Ind. Tax Ct. 2003).
Furthermore, the profits obtained do not go to any individual, they instead go
to the furtherance of the Petitioner’s mission. The property is owned, occupied
and used for the purpose of operating an assisted living facility and for
providing for the elderly population.
45. The Petitioner has
demonstrated that the Sanders Glen facility provides housing and services to
the “elderly and infirm or disabled and/or disadvantaged persons.” Furthermore,
Sanders Glen is owned by the taxpayer and occupied by the taxpayer. Sanders
Glen is not involved in any lease agreement, aside from the standard management
agreement with MRC. This makes the case at hand distinct from other cases
involving facilities lacking unity of ownership, occupancy and use. When the
unity of ownership and use is lacking the nexus between the purpose and the
ownership, occupancy and the use of the property must be examined. See Oaken
Bucket, 938 N.E.2d 645 (Ind. 2010). The Petitioner established a prima
facie case that Sanders Glen is owned, occupied and used for a
charitable purpose.
46. Once the Petitioner
establishes a prima facie case, the burden then shifts to the assessing official
to rebut the Petitioner’s case. See American United Life v. Maley, 803
N.E.2d 276 (Ind. Tax Ct. 2004). In the case at hand, the Respondent did not
dispute the Petitioner’s evidence, nor did the Respondent dispute the
Petitioner’s contentions that the facilities and services offered at Sanders
Glen have been enhanced since the 1996 decision regarding the same facility.
The Respondent argued instead that Sanders Glen should not be entitled to an
exemption based on current case law. See Oaken Bucket, 938 N.E.2d 645
(Ind. 2010); Tipton County Health Care Foundation, Inc., f/k/a Tipton County
Memorial Health Foundation v. Tipton County Assessor, 961 N.E.2d 1048 (Ind.
Tax Ct. 2012). The issue in Oaken Bucket Partners and Tipton County
Health Care Foundation revolved around the lack of unity of ownership and
occupancy. The court in Tipton County noted that, where different
entities own, use and occupy a property, each is required to show its own
charitable purpose. That principle is not at issue in this case. There is no
disagreement that the Petitioner owns, uses and occupies Sanders Glen.
47. The Respondent attempted to
focus on profits. The Petitioner is a non-profit company and its sole member is
a 501(c)(3) non-profit company. As discussed by the Petitioner’s witness, any
profits realized by the organization are used in furtherance of the mission of the
organization. Furthermore, the 990s presented by the Respondent did not focus
solely on Sanders Glen, they were for several properties owned by LifeCare. The
Respondent failed to prove that Sanders Glen in particular was making a profit.
Although the Board of Directors and the President are paid a salary, this fact
is not sufficient to prevent Sanders Glen from receiving an exemption. Most
non-profit organizations pay salaries to its Board of Directors and the
President of the organization, but this does not take away the tax exemption
for these non-profit organizations.
48. The Respondent also focused
on the PILOT program and its relevance to Ind. Code § 6-1.1-10-16.7. As the
Respondent correctly points out, Sanders Glen is not a Section 42 property and
Ind. Code § 6-1.1-10-16.7 does not apply to the case at hand. The Respondent is
speculating that some organizations designed to benefit low income individuals
might be attempting to side step requirements put in place by the General Assembly.
The Board will not conclude from the evidence that Sanders Glen is attempting
to circumvent the PILOT requirements which do not apply.
49. The Respondent attempts to
diminish the importance of the services provided at Sanders Glen by stating
that the Residents actually pay for the additional amenities. The evidence fails
to establish that Sanders Glen has a profit motive because it charges its
residents for the additional amenities offered in the resident’s rooms or in
the common area of the facility. Even a non-profit entity is entitled to recoup
costs. The mere fact that the residents “pay” for the additional amenities does
not create a situation where the exemption should be forfeited by the
Petitioner.
50. Similarly, the Respondent
argues that according to case law, the use of facilities for social and leisure
time activities are not charitable activities and the property is not entitled
to tax exemption. Sahara Grotto and Styx, Inc. v. St. Bd. of Tax Comm’rs, 261 N.E2d 873 (Ind.
App. 1970); Indianapolis Elks Bldg. Corp.
v. St. Bd. of Tax Comm’rs, 251 N.E.2d 673 (Ind. App. 1969). Neither
of these cases involved housing for the elderly. The problem with the
Respondent’s rationale when comparing the case at hand to these cases is that
in Sahara Grotto the Indiana Court of Appeals actually did find that a
portion of the property should have been found exempt. The problem with the
comparison to Indianapolis Elks Building Corporation is that the
facility was used for “eating, drinking, dancing, card playing, swimming and
general relaxation.” Indianapolis Elks Bldg. Corp., 251 N.E.2d at 681
(Ind. App. 1969). Sanders Glen differs from both of the facilities mentioned by
the Respondent in that it provides a safe living environment for the elderly population
that fosters a sense of community and involvement, which the Tax Court has deemed
a charitable activity. Wittenberg, 782 N.E.2d at 488 (Ind. Tax Ct.
2003).
51. The Board does not feel that
the decision in Oaken Bucket changed the analysis regarding the outcome
in this case. The Respondent is correct to assert that the Supreme Court has held
that in order to receive an exemption more is required than just renting at
below market rent. Oaken Bucket, 938 N.E.2d at 685 (Ind. 2010). However,
that is not the sole basis for the Board’s determination in this case. Further,
Oaken Bucket involved renting business space and not the renting of
apartment units for elderly individuals to reside in. The evidence in this case
shows that the Petitioner owns, occupies and uses the property to provide
housing and care for the elderly. The Tax Court has stated that a charitable purpose
is accomplished by meeting the needs of the aging.
52. In making its determination,
the Board is not ruling that every single assisted living facility is entitled
to a charitable exemption. The Board continues to recognize the long standing
principle that each exemption application must be examined on its own facts, as
it was in this case.
http://www.in.gov/ibtr/files/American_Eagle_Sanders_Glen_LLC_29-014-10-2-8-00001.pdf
