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

2007] TAX LAW 1155
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infrastructure, renovating existing home and building new homes. NCCDC
contributed $248,000 to the partnership that was used to secure mortgages on 17
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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
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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
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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
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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 . . .
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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
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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
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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
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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).