961 N.E.2d 1048 (Ind.Tax 2012), 49T10-1101-TA-6, Tipton County Health Care Foundation, Inc. v. Tipton County Assessor

Docket Nº:49T10-1101-TA-6.
Citation:961 N.E.2d 1048
Opinion Judge:WENTWORTH, J.
Party Name:TIPTON COUNTY HEALTH CARE FOUNDATION, INC. f/k/a Tipton County Memorial Hospital Foundation, Petitioner, v. TIPTON COUNTY ASSESSOR, Respondent.
Attorney:Brent A. Auberry, Daniel R. Roy, Fenton D. Strickland, Faegre Baker & Daniels LLP, Indianapolis, IN, for petitioner. Gregory F. Zoeller, Attorney General of Indiana, Lynne D. Hammer, Deputy Attorney General, Indianapolis, IN, for respondent.
Case Date:February 16, 2012
Court:Tax Court of Indiana
 
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Page 1048

961 N.E.2d 1048 (Ind.Tax 2012)

TIPTON COUNTY HEALTH CARE FOUNDATION, INC. f/k/a Tipton County Memorial Hospital Foundation, Petitioner,

v.

TIPTON COUNTY ASSESSOR, Respondent.

No. 49T10-1101-TA-6.

Tax Court of Indiana.

February 16, 2012

As Corrected Feb. 20, 2012.

Page 1049

Brent A. Auberry, Daniel R. Roy, Fenton D. Strickland, Faegre Baker & Daniels LLP, Indianapolis, IN, for petitioner.

Gregory F. Zoeller, Attorney General of Indiana, Lynne D. Hammer, Deputy Attorney General, Indianapolis, IN, for respondent.

WENTWORTH, J.

This case concerns whether the Indiana Board of Tax Review (the Indiana Board) properly determined that the Tipton County Health Care Foundation, Inc. (the Foundation) failed to raise a prima facie case that its assisted living facility is exempt from property tax under Indiana Code § 6-1.1-10-16. The Court affirms.

FACTS AND PROCEDURAL HISTORY

In 1998, Tipton County Memorial Hospital (the Hospital) built Autumnwood Village (Autumnwood), an assisted living facility. It is situated on 1.94 acres of land adjacent to the Hospital and two extended care facilities. All four facilities provide Tipton County's aging residents with access to a full continuum of care.

Autumnwood has 40 apartments, a central dining room, laundry rooms, a beauty salon, and several common areas. Many of the facility's amenities are similar to those found in traditional apartment living, but because Autumnwood was designed to meet the unique needs of individuals 55 years of age and older, it also provides amenities and services specifically directed at its aging population. For example, Autumnwood's apartments and common areas have extra-wide hallways and doors for wheelchair access; the hallways, elevators, and restrooms have handrails and grab bars for safety and mobility; all apartment doors are fireproof-rated so residents can wait in their apartments for rescue in the event of fire; and there is access to special security features, weekly transportation services, an emergency response system, on-site nursing, preferential access to certain nursing homes, and a variety of entertainment opportunities.

In late December 2007, the Hospital's Board of Trustees sold Autumnwood to the Foundation. Prior to the sale, the Hospital operated Autumnwood with assistance from Miller's Health Systems, Inc. (Miller's), an Indiana for-profit corporation that owns and operates 30 nursing homes under the name " Miller's Merry Manor" and 10 assisted living communities under the name " Miller's Senior Living" throughout Indiana. Under the terms of a " Management and Consulting Agreement" (the Agreement), Miller's provided consulting services, for a monthly fee, to the Hospital and for a short period to the Foundation with respect to Autumnwood's operations.

Beginning on January 1, 2008, the Foundation leased Autumnwood to Miller's for five years pursuant to a triple net lease (Lease). ( See Cert. Admin. R. at 434-57.) Under the Lease, the Foundation agreed to deliver exclusive possession of Autumnwood to Miller's, allowing Miller's to either rename Autumnwood consistent with one of its own trade names or continue to operate the facility under its current name. (Cert. Admin. R. at 436.) Miller's in turn agreed to use Autumnwood as an assisted living facility and pay the Foundation an annual base rent and certain other expenses

Page 1050

including all utilities and property taxes. (Cert. Admin. R. at 435, 438, 443.) The Lease further stated that:

[n]othing in th[e] Lease shall be deemed or be construed to render or constitute Landlord and Tenant, actually or constructively and in any or for any purpose, as being partners, joint venturers, or associates, or as having any relationship whatever other than that of Landlord and Tenant under th[e] Lease; nor shall anything in th[e] Lease be deemed or be construed to authorize either party to act as agent for the other party, except to the extent specifically and expressly provided otherwise in th[e] Lease.

(Cert. Admin. R. at 451.)

The Foundation timely filed an " Application for Property Tax Exemption" with the Tipton County Property Tax Assessment Board of Appeals (PTABOA) requesting a charitable purposes exemption for the 2008 and 2009 tax years. The PTABOA denied each. The Foundation filed an appeal with the Indiana Board, an administrative hearing was held, and the Indiana Board issued a final determination finding that the Foundation did not make a prima facie case that Autumnwood was entitled to a charitable purposes exemption.

On January 27, 2011, the Foundation filed this original tax appeal. The Court heard oral arguments on November 18, 2011. Additional facts will be supplied as necessary.

STANDARD OF REVIEW

This Court gives great deference to final determinations of the...

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