88 N.E.3d 814 (Ind.Tax 2017), 71T10-1701-TA-00002, Starke County Assessor v. Porter-Starke Services, Inc.

Docket Nº:71T10-1701-TA-00002
Citation:88 N.E.3d 814
Opinion Judge:WENTWORTH, J.
Party Name:STARKE COUNTY ASSESSOR, Petitioner, v. PORTER-STARKE SERVICES, INC., Respondent.
Attorney:ATTORNEY FOR PETITIONER: MARTIN R. LUCAS, ATTORNEY AT LAW, North Judson, IN ATTORNEYS FOR RESPONDENT: KEVIN G. KERR, TODD A. LEETH, HOEPPNER WAGNER & EVANS LLP, Valparaiso, IN
Case Date:December 08, 2017
Court:Tax Court of Indiana
 
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88 N.E.3d 814 (Ind.Tax 2017)

STARKE COUNTY ASSESSOR, Petitioner,

v.

PORTER-STARKE SERVICES, INC., Respondent.

No. 71T10-1701-TA-00002

Tax Court of Indiana

December 8, 2017

Page 815

ON APPEAL FROM A FINAL DETERMINATION OF THE INDIANA BOARD OF TAX REVIEW

ATTORNEY FOR PETITIONER: MARTIN R. LUCAS, ATTORNEY AT LAW, North Judson, IN

ATTORNEYS FOR RESPONDENT: KEVIN G. KERR, TODD A. LEETH, HOEPPNER WAGNER & EVANS LLP, Valparaiso, IN

OPINION

WENTWORTH, J.

The Starke County Assessor challenges the Indiana Board of Tax Review’s final determination that Porter-Starke Services, Inc. was entitled to an 81% charitable purposes exemption for real property it owned during the 2015 tax year. The Court affirms the Indiana Board’s final determination.

FACTS AND PROCEDURAL HISTORY

Porter-Starke is an Indiana and federal non-profit corporation that provides,

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among other things, mental health services. (Cert. Admin. R. at 2, 84.) Its real property at issue is an 8,239 square-foot medical building situated on a 1.147 acre lot located in Starke County, Indiana. (Cert. Admin. R. at 5, 11-12.) During 2015, Porter-Starke leased 1,591 square-feet of its building to a third party. (Cert. Admin. R. at 31 ¶ 11, 71, 82.)

During the year at issue, Porter-Starke operated a community mental health center (" CMHC" ) certified by the Indiana Family and Social Services Administration. (See Cert. Admin. R. at 103-04.) As a CMHC, Porter-Starke administers programs that provide, among other things, medical and psychiatric care, addiction treatment, nursing, counseling, therapy, and training to mentally ill, chronically addicted, and emotionally disturbed individuals. (Cert. Admin. R. at 200-03, 206, 229-30.) It provides these services to long-and short-term patients of all ages. (Cert. Admin. R. at 201-02, 208-09.) These services are overseen by an unpaid board of directors and provided by both volunteers and paid employees, including a licensed psychiatrist and a medical doctor. (Cert. Admin. R. at 205-06, 222-23, 241.) Moreover, as a CMHC, Porter-Starke is subject to oversight by the State Board of Accounts, which requires an annual audit, and the State, which audits its medical records. (Cert. Admin. R. at 233-34.)

Porter-Starke receives subsidies and other financial assistance from various governmental sources, including Starke County, the state of Indiana, and federal grants. (Cert. Admin. R. at 213-14, 220, 226-27, 235-41.) In addition, Porter-Starke charges its patients fees for its services, but it discounts those fees based on the patient’s ability to pay and does not refuse service to those unable to pay. (Cert. Admin. R. at 154, 230, 240-41.)

On April 15, 2015, Porter-Starke filed an Application for Property Tax Exemption with the Starke County Property Tax Assessment Board of Appeals (PTABOA) for the 2015 tax year seeking a charitable purposes exemption for 100% of its property, claiming it was used exclusively to operate the CMHC. The PTABOA denied the exemption, and Porter-Starke appealed to the Indiana Board.

The Indiana Board held a hearing on August 10, 2016, and issued its final determination on December 7, 2016. The Indiana Board found that Porter-Starke had established 1) that 81% of its property was used exclusively for charitable purposes, providing mental health services as a certified CMHC, and 2) that it provided a public benefit by fulfilling an essential government obligation that lessened the burden that would otherwise fall on local law enforcement and correctional resources to address mental health issues.[1] (Cert. Admin. R. at 37-38 ¶¶ 35-38, 40-41 ¶¶ 44-48.) Accordingly, the Indiana Board granted Porter-Starke a charitable purposes exemption for 81% of its real property.2 (Cert. Admin. R. at 41 ¶ 50.)

On January 10, 2017, the Assessor initiated this original tax appeal. On June 30, 2017, the Court heard the parties’ oral arguments. Additional facts will be provided as necessary.

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STANDARD OF REVIEW

The Court gives great deference to decisions by the Indiana Board when it acts within its authority. Marineland Gardens Cmty. Ass’n v. Kosciusko Cnty. Assessor, 26 N.E.3d 1087, 1089 (Ind.Tax Ct. 2015). The Court, however, may reverse a final determination by the Indiana Board only if it is arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; contrary to constitutional right, power, privilege, or immunity; in excess of or short of statutory jurisdiction, authority, or limitations; without observance of procedure required by law; or unsupported by substantial or reliable evidence. IND. CODE § 33-26-6-6(e)(1)-(5) (2017). As the party appealing the Indiana Boards final determination, the Assessor bears the burden to prove it is invalid based on the evidence presented to the Indiana Board. See Johnson Cnty. Prop. Tax Assessment Bd. of Appeals v. KC...

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