Justia Non-Profit Corporations Opinion Summaries

Two taxing districts undertook parallel challenges to a property’s partial tax exemption. Appellee Huston Properties, Inc. (“Taxpayer”), owned the subject property (the “Property”). In 2013, Taxpayer, claiming to be a charitable institution, sought tax-exempt status for the Property for the 2014 tax year. After a hearing, the Chester County Board of Assessment Appeals granted a partial exemption, reasoning that that portion of the Property was used for charitable purposes. The City of Coatesville appealed that decision to the Court of Common Pleas. Six days later, the Coatesville Area School District, another taxing authority encompassing the Property, lodged its own appeal, also challenging the Property’s partially-tax-exempt status. The School District also intervened in the City's case. Ultimately, the trial court affirmed the Board's grant of a partial exemption. Both the City and the School District appealed to the Commonwealth Court, and Taxpayer cross-appealed as to each, seeking fully-exempt status for the Property. In a memorandum decision, the Commonwealth Court vacated and remanded to the trial court for more specific findings to support the partial tax exemption. On remand, the trial court set forth particularized findings and conclusions, and re-affirmed its earlier decision assessing the Property. At this juncture, the City elected not to appeal to the Commonwealth Court. The School District appealed the ruling in its own case, but it did not appeal the identical, simultaneous ruling which contained the City’s docket number. Taxpayer moved to quash the School District’s appeal. The Commonwealth Court granted the motion and dismissed the appeal observing that the common pleas court’s ruling in the City’s case became final after no party appealed it. Because the School District had intervened in that matter, it was a party to those proceedings. With that premise, the court found that res judicata and collateral estoppel barred it from reaching the merits. The Pennsylvania Supreme Court found that issue preclusion under the rubric of collateral estoppel should not have been applied to defeat the School District’s ability to obtain merits review of its substantive arguments in the intermediate court. The Commonwealth Court's judgment was vacated and the matter remanded for a merits disposition of the consolidated cross-appeals. View "In Re: Appeal of Coatesville Area Sch Dist" on Justia Law

At issue in this case was the tax status of a 9.9-acre parcel of land containing an 11,500-square-foot garage that was owned and used by Zlotoff Foundation, Inc., a nonprofit charitable organization, for the purpose of storing and maintaining a collection of classic automobiles that it displayed at its nearby museum. The trial court ruled that the garage and the land were tax-exempt because they were used for a public purpose. However, it denied the Foundation’s request for a refund of property taxes paid to the Town of South Hero from 2016 to 2018 because the Foundation did not obtain a certificate of authority allowing it to transact business in Vermont until 2019. The Foundation and the Town both appealed. Finding no reversible error, the Vermont Supreme Court affirmed judgment. View "Zlotoff Foundation, Inc. v. Town of South Hero" on Justia Law

In 2010, the Internal Revenue Service issued a refund to the Wichita Center of Graduate Medical Education (a federally qualified charitable organization) on overpaid taxes along with incorrectly calculated interest on the refund. The IRS then sought repayment of part of the interest. Under the Internal Revenue Code, corporate taxpayers received a lower refund interest rate than other taxpayers such as individuals or partnerships. The Center claimed it was not a corporation for purposes of this section and was be entitled to the higher interest rate applicable to non-corporations. The Tenth Circuit affirmed the district court’s finding that the Center was a corporation and subject to the lower interest rate: the statutory text compelled the conclusion that the Center, even though it did not issue stock or generate profit, had to be treated as an ordinary corporation for purposes of the refund statute. View "Wichita Ctr for Grad Med. Ed. v. United States" on Justia Law

Losantiville Country Club hosted unprofitable nonmember events for many years, consistently using those losses to avoid paying tax on its investment income. Because the Internal Revenue Service determined that Losantiville did not hold nonmember events for the primary purpose of making a profit, the club could not offset its income from investments with losses from those nonmember activities. Invalidating those deductions resulted in Losantiville having underpaid tax on its unrelated business income between 2010 and 2012. Plus, the IRS imposed accuracy-related penalties. On appeal, the Tax Court upheld this determination, reasoning that Losantiville did not intend to profit from its nonmember events. Finding no reversible error in that decision, the Sixth Circuit affirmed. View "Losantiville Country Club v. Comm'r of Internal Revenue" on Justia Law

Plaintiff The Marist Brothers of New Hampshire (MBNH) appealed several superior court orders: (1) a decision upholding the denial by defendant Town of Effingham (Town), of MBNH’s request for a charitable tax exemption, for tax year 2015, for real property; and (2) an order granting the Town’s motion in limine to exclude evidence of the tax treatment of New Hampshire youth camps other than the camp run by MBNH. When Camp Marist was not in session, MBNH rented the Property subject to this appeal: no restrictions were placed on who is eligible to rent, or how renters use, the Property. Rental proceeds were allocated to either the “regular Camp fund, the running of the Camp, or . . . to some of [MBNH’s] scholarships.” MBNH argues that the trial court erred in determining that it met none of the "ElderTrust" factors. After careful consideration, the New Hampshire Supreme Court concluded MBNH did satisfy all ElderTrust factors, reversing the trial court. View "The Marist Brothers of New Hampshire v. Town of Effingham" on Justia Law

The J.R. Simplot Foundation appealed a district court’s ruling that the charitable property tax exemption under Idaho Code section 63-602C did not apply to the property known as Jack’s Urban Meeting Place (JUMP) while JUMP was under construction. In 2015, the Foundation applied for a charitable property tax exemption for JUMP. The Ada County Board of Equalization (Ada County) denied the tax exemption because JUMP was under construction and therefore not used exclusively for the Foundation’s charitable purposes. The Idaho Board of Tax Appeals (IBTA) reversed, finding construction was not a “use” of the property and the only uses at JUMP were in furtherance of the Foundation’s charitable objectives. Accordingly, the IBTA held JUMP was entitled to the property tax exemption. Ada County appealed the decision of the IBTA to the district court. The district court, ruling on cross motions for summary judgment, reversed the decision of the IBTA finding construction was a “use” of the property and that construction is not a charitable use. The Foundation appealed, but finding no reversible error, the Idaho Supreme Court affirmed the district court. View "Ada Co Bd of Equalization v. J.R. Simplot" on Justia Law

The City of Rutland appealed a superior court decision that two buildings owned by the Rutland County Parent Child Center (RCPCC) were exempt from property taxation. The City argued neither property met the requirements of the public use tax exemption in 32 V.S.A. 3802(4). RCPCC is one of fifteen parent-child centers in Vermont. Under the statutory definition, a parent-child center is a “community-based organization established for the purpose of providing prevention and early intervention services." The superior court determined on summary judgment that RCPCC’s properties did not qualify for the public school tax exemption but, after a bench trial, decided that RCPCC’s use of the properties in question met the three-prong public use exemption test from American Museum of Fly Fishing, Inc. v. Town of Manchester, 110, 557 A.2d 900 (1989), and that, accordingly, both properties were exempt from property tax assessment. The Vermont Supreme Court found that RCPCC's use of the buildings met all elements of the American Museum of Fly Fishing's test, and affirmed the superior court's judgment. View "Rutland County Parent Child Center, Inc. v. City of Rutland" on Justia Law

Respondent El Castillo Retirement Residences was a self-sustaining retirement and continuing care community, funded entirely by admission and monthly fees paid by residents who have met El Castillo’s requirements for sufficient financial resources, including a minimum net worth, and have satisfied specific health criteria. It did not accept residents who are Medicare or Medicaid-dependent, or charity-dependent or any residents who cannot afford to buy their way into the community. It neither donated any significant services or property to charitable causes, nor used its property primarily and substantially for a charitable purpose. The New Mexico Supreme Court agreed with the Court of Appeals that El Castillo did not use its property for charitable purposes and was therefore not exempt from the constitutional requirement 5 of equal taxation, the Court used the opportunity of this opinion to clarify that Section 7-36-7(B)(1)(d) must be read in harmony with controlling constitutional requirements. Accordingly, the Court held that El Castillo was not entitled to property-tax exemptions under either Section 7-36- 8 7(B)(1)(d) or Article VIII, Section 3 of the New Mexico Constitution because El Castillo did not use its property primarily for substantial public benefit furthering charitable purposes. View "El Castillo Ret. Residences v. Martinez" on Justia Law

Respondent El Castillo Retirement Residences was a self-sustaining retirement and continuing care community, funded entirely by admission and monthly fees paid by residents who have met El Castillo’s requirements for sufficient financial resources, including a minimum net worth, and have satisfied specific health criteria. It did not accept residents who are Medicare or Medicaid-dependent, or charity-dependent or any residents who cannot afford to buy their way into the community. It neither donated any significant services or property to charitable causes, nor used its property primarily and substantially for a charitable purpose. The New Mexico Supreme Court agreed with the Court of Appeals that El Castillo did not use its property for charitable purposes and was therefore not exempt from the constitutional requirement 5 of equal taxation, the Court used the opportunity of this opinion to clarify that Section 7-36-7(B)(1)(d) must be read in harmony with controlling constitutional requirements. Accordingly, the Court held that El Castillo was not entitled to property-tax exemptions under either Section 7-36- 8 7(B)(1)(d) or Article VIII, Section 3 of the New Mexico Constitution because El Castillo did not use its property primarily for substantial public benefit furthering charitable purposes. View "El Castillo Ret. Residences v. Martinez" on Justia Law

Baruch SLS, Inc., a Michigan nonprofit corporation, sought exemptions from real and personal property taxes as a charitable institution under MCL 211.7o and MCL 211.9 for tax years 2010–2012. Petitioner based its request on the fact that it offered an income-based subsidy to qualifying residents of Stone Crest Assisted Living, one of its adult foster care facilities, provided those residents had made at least 24 monthly payments to petitioner. The Tax Tribunal ruled that Stone Crest was not eligible for the exemptions because petitioner did not qualify as a charitable institution under three of the six factors set forth in Wexford Med Group v City of Cadillac, 474 Mich 192 (2006). The Court of Appeals reversed with respect to two of the Wexford factors, but affirmed the denial of the exemptions on the ground that petitioner had failed to satisfy the third Wexford factor because, by limiting the availability of its income-based subsidy, petitioner offered its services on a discriminatory basis. The Michigan Supreme Court found the third factor in the Wexford test excluded only restrictions or conditions on charity that bore no reasonable relationship to a permissible charitable goal. Because the lower courts did not consider Baruch’s policies under the proper understanding of this factor, the Court vacated the Court of Appeals’ and Tax Tribunal’s opinions in part and remanded this case to the Tax Tribunal for further proceedings. View "Baruch SLS, Inc. v. Twp of Tittabawassee" on Justia Law