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Thursday, July 31, 2014

Ind. Courts - "Columbus agency's future on line in tax-exemption fight"

The Indiana Tax Court's June 6th decision in Housing Partnerships, Inc. v. Tom Owens, Bartholomew County Assessor, is the focus of a long article today by Matt Hansel of The Republic on the agency's pending motion to reconsider. A few quotes:

HPI was formed in 1989 to assist low-income residents in finding affordable housing in Bartholomew County. The organization combined with Aging and Community Services in 2013 to become Thrive Alliance, a strategic partnership of agencies under common management.

Mark Lindenlaub, executive director of Thrive Alliance, said that unless overturned, the June 6 Tax Court ruling threatens the viability of HPI as a community service organization.

"Our business model is based on HPI being tax exempt, and the decision to deny the exemption, if it stands, will create serious challenges for us," Lindenlaub said.

Lindenlaub said HPI focuses on improving the quality of housing and quality of life for residents and develops strategies to create and support good neighborhoods.

HPI renovates and builds homes as rental properties and assists residents in buying their first home and to understand the responsibilities associated with home ownership.

The organization also completes repair projects for elderly or disabled homeowners. * * *

In its June 6 decision, the Indiana Tax Court noted it gives great deference to the tax boards' conclusions and stated an adequate reason to overturn that ruling was not provided.

The court determined that HPI failed to demonstrate that the properties in its portfolio are owned, occupied and used for a charitable purpose as described in the Indiana Code.

In the eyes of the court, HPI also failed to present evidence outlining any conditions applied to the grants it received that would indicate it relieved a burden of the government.

HPI has asked the Indiana Tax Court to reconsider its decision. If the June 6 ruling stands, the next recourse for the nonprofit is to appeal to the Indiana Supreme Court.

HPI presented testimony from tenants, former tenants, the executive director of the Columbus Housing Authority and others, attesting to its value in the county, but to no avail.

Lindenlaub said the agency is taking matters one step at a time and has not yet decided if it would pursue the case to the high court if the upcoming decision goes against HPI.

Wilson said it is important to recognize that HPI's reasonable rents and nonprofit status do not automatically qualify it for a property tax exemption.

"The courts have continually concluded that just because a nonprofit corporation charges low-income individuals below-market rents for its apartments, that is not enough to show that the property is being used for a charitable purpose," Wilson said.

HPI was, however, granted a property tax exemption from 2002 to 2006 and its long-term business model has been based on that decision.

Lindenlaub said when HPI does housing projects, it puts together a budget to purchase, renovate and manage those properties over a 15- to 30-year period.

"When we do that, we have to project our expenses, one of which would be property taxes — and we didn't plan to have to pay for taxes," Lindenlaub said.

Posted by Marcia Oddi on July 31, 2014 11:17 AM
Posted to Ind. Tax Ct. Decisions