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Thursday, June 30, 2011

Ind. Gov't. - More on: Reexamination of charitable property tax exemptions involving Imagine Schools Inc. may disclose that Indiana education dollars are flowing out of state

Updating this ILB entry from April 19, 2011, Vivian Sade has a long story today in the Fort Wayne Journal Gazette headed: "Taxpayers liable for Imagine’s bill: Assessment ruling a blow to charter school." The story begins:

The first statewide challenge to the tax-exempt status of a charter school ended with a landmark denial for a Fort Wayne school, a decision that could be detrimental to Allen County taxpayers.

The property tax exemption for JERIT CS Fund LLC, property owners of the Imagine MASTer Academy’s 26-acre campus on North Wells Street, was rejected June 14 by the Allen County Property Tax Assessment Board of Appeals.

Indiana taxpayers will ante up rent and operating costs of $4.3 million this year for four Indiana Imagine charter schools – two located in Fort Wayne. The bulk of those dollars will not go back into the classroom; they will go to an out-of-state investment company that is in the charter school leasing business – the publicly traded Entertainment Properties Trust, which reported $84.7 million in profits last year.

The complicated investment strategy maze begins with JERIT, which is owned by Entertainment Properties Trust in Kansas City, Mo., a for-profit company that deals not only in real estate investments but also in multiplex theaters, water parks, ski resorts and vineyards, according to its website. * * *

The denial by the county tax assessment board holds that a property owner (JERIT), not just the tenant (Imagine Schools), must demonstrate the property is owned for a tax-exempt purpose for religious, educational, scientific or charitable reasons.

The board of appeals’ denial cited a Supreme Court case from December 2010, known as the “Oaken Bucket case,” in which justices reversed a decision by the Indiana Tax Court and ruled that a property owner doesn’t automatically qualify for a tax exemption even if property is used for a charitable or exempt purpose.

Posted by Marcia Oddi on June 30, 2011 12:28 PM
Posted to Indiana Government