Hamilton County Assessor v. SPD Realty, LLC
2014 Ind. Tax LEXIS 22
| Ind. T.C. | 2014Background
- SPD Realty sought a charitable exemptions for 2009 on property used to support New Life Generation tissue bank operations.
- New Life Generation, Inc. was formed in 2008 as a public benefit charity to procure, recover, and provide donor tissue for medical use; SPD purchased and leased the property to New Life.
- New Life leased 5,000 of 9,500 square feet to New Life for a 10-year term; SPD bore mortgage, taxes, build-out and operating costs while SPD paid exterior maintenance.
- PTABOA denied the exemption in 2009; the Indiana Board granted the exemption in 2011; the Hamilton County Assessor separately appealed.
- The court applies narrow, fact-intensive review of ownership, occupancy, and use, determining whether the record supports a charitable-use finding and complies with statutory requirements, including the 50% usage test.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether New Life occupied and used the property for a charitable purpose | Assessor contends New Life did not use the property for exempt charitable purposes | SPD and New Life presented evidence of charitable tissue donation and public benefit | Substantial evidence supports Board finding of charitable use. |
| Whether SPD owned the property for a charitable purpose | SPD’s close relationship with New Life and profit-motive potential negate charitable ownership | Record shows SPD’s rent covered only mortgage/expenses; no profit motive; single-property landlord | Record supports Board finding that SPD owned for a charitable purpose. |
| Whether the property was predominantly used for charitable purposes (50% test) | New Life used the property for charitable purposes for only four months, failing the 50% threshold | During four months, use was 100% charitable; total use supports predominant charitable use | Board’s determination is not contrary to law; four months satisfied 50% test. |
Key Cases Cited
- Grandview Care, Inc. v. Knox Cnty. Prop. Tax Assessment Bd. of Appeals, 826 N.E.2d 182 (Ind. 2005) (test for charitable purpose requires relief of human want and public-benefit expectation)
- Sangralea Boys Fund, Inc. v. State Bd. of Tax Comm’rs, 686 N.E.2d 954 (Ind. Tax Ct.1997) (unity of ownership/occupancy/use when parties do not dispute charitable purpose)
- Amax Inc. v. State Bd. of Tax Comm’rs, 552 N.E.2d 850 (Ind. Tax Ct.1990) (final determination sustained when record supports charitable-use conclusion)
- Freudenberg-NOK Gen. P’ship v. State Bd. of Tax Comm’rs, 715 N.E.2d 1026 (Ind. Tax Ct.1999) (evidence allocation issues may be negated when parties concede related issue)