St. Mary's Bldg. Corp. v. Redman
Citation | 135 N.E.3d 681 |
Decision Date | 21 November 2019 |
Docket Number | Case No. 18T-TA-00013 |
Parties | ST. MARY'S BUILDING CORPORATION, Petitioner, v. Sarah E. REDMAN, Warrick County Assessor, Respondent. |
Court | Tax Court of Indiana |
ATTORNEYS FOR PETITIONER: ANDREW B. HOWK, N. KENT SMITH, HALL, RENDER, KILLIAN, HEATH & LYMAN, P.C., Indianapolis, IN
ATTORNEYS FOR RESPONDENT: CURTIS T. HILL, JR., ATTORNEY GENERAL OF INDIANA, JEFFERSON S. GARN, WINSTON LIN, REBECCA L. McCLAIN, PARVINDER K. NIJJAR, DEPUTY ATTORNEYS GENERAL, Indianapolis, IN
ATTORNEYS FOR AMICI CURIAE ASSOCIATION OF INDIANA COUNTIES and WARRICK COUNTY BOARD OF COMMISSIONERS: MARK E. GIAQUINTA, SARAH L. SCHREIBER, HALLER & COLVIN, P.C., Fort Wayne, IN
Saint Mary's Building Corporation ("Building Corporation") has appealed the final determination of the Indiana Board of Tax Review that denied its request for a property tax exemption for the 2014 and 2015 tax years. Upon review, the Court affirms the Indiana Board's final determination.
The Building Corporation, an Indiana non-profit corporation,1 owns the Epworth Crossing medical building located in Newburgh, Indiana. (See Cert. Admin. R. at 4385-86.) The Building Corporation maintains that its sole corporate member is St. Mary's Health, Inc., which owns and operates a hospital in Evansville, Indiana ("the Hospital"). (See Pet'r Br. at 6-8 (citing Cert. Admin. R. at 4302, 4365).)2
In May of both 2014 and 2015, the Building Corporation filed applications for exemption with the Warrick County Property Tax Assessment Board of Appeals ("PTABOA") seeking a charitable purposes exemption, an educational purposes exemption, and a religious purposes exemption for the portions of Epworth Crossing (as well as the personal property therein) that it leased to St. Mary's Breast Center, LLC, St. Mary's Medical Group, LLC, and St. Mary's Medical Center of Evansville, Inc. (See, e.g., Cert. Admin. R. at 13 - 17, 121-25, 4286-88, 4529-31, 4537.) St. Mary's Breast Center used its leased space to operate a breast imaging and therapy center, St. Mary's Medical Group used its leased space to operate a primary care physician's practice, and St. Mary's Medical Center of Evansville used its leased space to operate both an urgent care and an imaging and laboratory center. (See Cert. Admin. R. at 4530, 4537.)3 The Building Corporation's appeal documentation stated that (Cert. Admin. R. at 4530.)
The PTABOA denied the exemption applications and the Building Corporation subsequently pursued an appeal with the Indiana Board. (See, e.g., Cert. Admin. R. at 1 - 3, 109-11.) In its appeal documentation, the Building Corporation stated it (See, e.g., Cert. Admin. R. at 1 - 3, 109-11.) Furthermore, the Building Corporation indicated that it was a "wholly-owned affiliate" of the Hospital and that each of its three tenants was "owned and operated by [the Hospital] as [one of its] departments ... or as separate wholly-owned, not-for-profit 501(c)(3) entities."4 (Cert. Admin. R. at 4248, 4253, 4255-56.)
(Cert. Admin. R. at 5132-33 ¶ 30 (citations omitted).) (See also, e.g., Cert. Admin. R. at 5130 ¶ 24 n.7; 5131 ¶ 26 n.9; 5135 ¶ 39 n.14; 5136-37 ¶¶ 43, 45 nn.17 & 18; 5138 ¶ 47 n.19 (all indicating instances in its final determination where the Indiana Board admonished the Building Corporation for citing to evidence that only "vaguely" supported its propositions, not providing evidentiary support at all, not walking the Indiana Board through its evidence and analysis, an overall lack of attention to detail, and carelessness in its briefing citation).
On April 9, 2018, the Building Corporation initiated this original tax appeal. After filing the appeal, the Building Corporation abandoned its claims for both the educational purposes exemption and the religious purposes exemption, pursuing only its charitable purposes exemption claim. (See Pet'r Br. at 15; Oral Argument Tr. at 3-5.) On March 15, 2019, the Court conducted oral argument on the matter. Additional facts will be supplied when necessary.
The party seeking to overturn an Indiana Board final determination bears the burden of demonstrating its invalidity. Osolo Twp. Assessor v. Elkhart Maple Lane Assocs., 789 N.E.2d 109, 111 (Ind. Tax Ct. 2003). Consequently, the Building Corporation must demonstrate to the Court that the Indiana Board's final determination 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) (2019).
In Indiana, all tangible property is subject to taxation. IND. CODE § 6-1.1-2-1 (2014). Nevertheless, the Indiana Constitution provides that the Legislature may exempt certain categories of property from taxation. See IND. CONST. art X, § 1. Pursuant to that grant of authority, the Legislature enacted Indiana Code § 6-1.1-10-16, which pertains to property used for, among other things, "charitable purposes." See generally IND. CODE § 6-1.1-10-16 (2014).
Under Indiana Code § 6-1.1-10-16(a), "[a]ll or part of a building is exempt from property taxation if it is owned, occupied, and used [ ] for ... charitable purposes." I.C. § 6-1.1-10-16(a). This exemption also generally extends to the land on which an exempt building is situated, as well as the personal property that is contained therein. See I.C. § 6-1.1-10-16(c), (e).
A charitable purpose will be found to exist when "1) there is evidence of relief of human want ... manifested by obviously charitable acts different from the everyday purposes and activities of man in general; and 2) there is an expectation of a benefit that will inure to the public by the accomplishment of such acts." Hamilton Cty. Assessor v. SPD Realty, LLC, 9 N.E.3d 773, 775 (Ind. Tax Ct. 2014) (internal quotation marks omitted). " Indiana Code § 6-1.1-10-16 requires the showing of a charitable purpose to ensure that the benefit conferred by the exemption both relieves the government of a cost that it would otherwise bear and does not primarily serve a commercial profit motive." Id. See also Starke Cty. Assessor v. Porter-Starke Servs., Inc., 88 N.E.3d 814, 819 (Ind. Tax Ct. 2017) ( ); College Corner, L.P. v. Dep't of Local Gov't Fin., 840 N.E.2d 905, 908 (Ind. Tax Ct. 2006) ( ); Indianapolis Osteopathic Hosp., Inc. v. Indiana Dep't of Local Gov't Fin., 818 N.E.2d 1009, 1014 (Ind. Tax Ct. 2004) ( ), review denied.
Under Indiana Code § 6-1.1-10-16, the Legislature does not require unity of ownership, occupation, and use to reside with a single entity. Sangralea Boys Fund, Inc. v. State Bd. of Tax Comm'rs, 686 N.E.2d 954, 959 (Ind. Tax Ct. 1997), review denied. Instead, as long as property is owned for a charitable purpose, occupied for a charitable purpose, and used for a charitable purpose "regardless of by whom," the property can...
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