Recent Developments in Indiana Taxation - I.U. School of Law ...

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1154 INDIANA LAW REVIEW [Vol. 40:1103 537 provide education to others but also must “provide[] some public benefit.” The Supreme Court reviewed a number of earlier decisions that, in its view, had properly granted an education exemption to programs at private schools, programs that provided training not otherwise available in public schools, and programs that only relieved the state of Indiana’s burden of education in a limited 538 fashion. However, each of those programs was “offered to the public and did 539 not further the business objectives of the attendees.” The Tax Court should 540 have reviewed the SBTC’s decision for an abuse of discretion. The Supreme 541 Court found that the SBTC had not abused its discretion. Rather, substantial evidence supported the SBTC’s conclusion that the training provided by the association to its members was incidental to its promotional activities and that 542 the training did not provide a public benefit. The association was denied the educational purpose exemption. 543 III. INDIANA TAX COURT DECISIONS The Tax Court rendered a variety of opinions from January 1, 2006, to December 31, 2006. Specifically, the Tax Court issued 16 published opinions and decisions: 12 of which concerned the Indiana real property tax; three of which concerned the Indiana inheritance tax; and one of which concerned the riverboat wagering tax. A summary of each opinion and decision appears below. A. Property Tax 1. College Corner, L.P. v. Department of Local Government Finance. — 544 College Corner, L.P. (“CCLP”) initiated this action on January 2, 2002, 545 appealing the denial of a property tax exemption for the 2000 tax year. CCLP is a limited partnership with one general partner, the Old Northside Foundation, Inc. (“ONF”), and one limited partner, the National City Community 546 Development Corporation (“NCCDC”). NCCDC is an Ohio for-profit 547 corporation. ONF is an Indiana not-for-profit corporation and is a 501(c)(3) 548 charitable organization. CCLP was formed to revitalize the College Corner area in the historic Old Northside of Indianapolis by rebuilding the area’s Tax Court. Id. at 1264. 537. Id. (citing State Bd. of Tax Comm’rs v. Ft. Wayne Sport Club, Inc., 258 N.E.2d 874, 881 (Ind. Ct. App. 1970)). 538. Id. at 1265-66. 539. Id. at 1266. 540. Id. at 1265. 541. Id. at 1267. 542. Id. 543. Id. 544. 840 N.E.2d 905 (Ind. Tax Ct. 2006). 545. Id. at 906-07. 546. Id. at 906. 547. Id. 548. Id.
2007] TAX LAW 1155 549 infrastructure, renovating existing home and building new homes. NCCDC contributed $248,000 to the partnership that was used to secure mortgages on 17 550 parcels in the area. In exchange for its investment, NCCDC was to receive a fixed 7% return on the amount which NCCDC advanced for each property 551 redeveloped and sold. CCLP filed applications for a property tax exemption for each of the 17 parcels for the 2000 tax year, claiming that it was “entitled to 552 the charitable purposes exemption provided by I.C. § 6-1.1-10-16(a).” The applications were denied by the Marion County Property Tax Assessment Board of Appeals and by the SBTC. The DLGF, which was substituted for the SBTC as respondent, argued that CCLP had not shown that its use of the property 553 would provide “relief of human want” as required by Indiana law. However, the Tax Court said that “the term ‘charity’ must be broadly construed and . . . 554 encompasse[d] more than simply providing relief to the needy.” CCLP presented a prima facie case demonstrating that its restoration of the College Corner area would result in a number of benefits to the community that meet charitable purposes: assistance in combating community deterioration, preservation of the historical character of the area, and relief of the government burden to provide and maintain infrastructure such as sidewalks and alleys. 555 The DLGF also argued that CCLP should not qualify for an exemption because 556 NCCDC will earn a profit from its investment. However, the statute language that grants a charitable purpose exemption from property tax does so for any type of entity which otherwise qualifies for the exemption, regardless of the entity’s 557 profit motive. In addition, the profit realized by NCCDC is secondary to its stated charitable purpose of revitalizing neighborhoods such as College 558 Corner. The Tax Court noted that the SBTC failed to address any of CCLP’s evidence of its charitable purposes and also ignored previous Indiana court decisions that have held that an organization’s profit motive does not determine 559 whether or not it serves a charitable purpose. The Tax Court reversed the SBTC’s final determination because it was “unsupported by substantial evidence, arbitrary, capricious, and . . . an abuse of discretion.” 560 561 2. Eckerling v. Wayne Township Assessor. —The Eckerlings initiated this 549. Id. at 906-07. 550. Id. at 907. 551. Id. 552. Id. 553. Id. at 909. 554. Id. 555. Id. at 909-10. 556. Id. at 911. 557. Id. 558. Id. 559. Id. at 911-12. 560. Id. at 912. 561. 841 N.E.2d 674 (Ind. Tax Ct. 2006).
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