Idaho Youth Ranch, Inc. v. Ada County Board of Equalization
157 Idaho 180
Idaho2014Background
- Idaho Youth Ranch Foundation formed Idaho Youth Ranch Nagel Center, LLC (LLC) to purchase a Boise commercial property in 2006; the Foundation was the LLC’s sole member.
- The LLC purchased the property and immediately leased it back to the Youth Ranch under a 25‑year triple‑net lease; rent equaled $25,000/month or the LLC’s mortgage payment, whichever was greater.
- The LLC and Youth Ranch sought a charitable property tax exemption for 2009 under Idaho Code § 63‑602C, claiming the property belonged to a charitable entity.
- Ada County BOE denied the exemption; the Idaho Board of Tax Appeals and the district court affirmed after cross‑motions for summary judgment.
- The district court applied the eight‑factor Sunny Ridge test to determine charitable status and concluded the LLC was not charitable.
- The Idaho Supreme Court affirmed on the narrower ground that a property leased in its entirety is not exempt under § 63‑602C, so it did not reach the Sunny Ridge factors’ application.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the LLC’s property is exempt as property of a charitable entity under § 63‑602C | Youth Ranch/LLC: property belongs to a charitable entity (the Foundation/Youth Ranch) and should be exempt | State/Respondent: property is leased and thus not exempt under the statute | Held: Not exempt — property leased in its entirety is disqualified from exemption under § 63‑602C |
| Whether statutory language bars exemption whenever property is leased, or only when leased for commercial purposes | Youth Ranch/LLC: statute should be read to exclude only commercial leases (reading of Boise Central) | State/Respondent: plain language treats a full lease of property as disqualifying regardless of purpose | Held: Court gives controlling effect to plain text — if the entire property is leased, it is not exempt; Boise Central limited to mixed‑use leases |
Key Cases Cited
- Appeal of Sunny Ridge Manor, Inc. v. State Tax Comm’r, 106 Idaho 98, 675 P.2d 813 (Idaho 1984) (articulates eight‑factor test for charitable status)
- Boise Central Trades & Labor Council, Inc. v. Bd. of Ada Cnty. Comm’rs, 122 Idaho 67, 831 P.2d 535 (Idaho 1992) (interpreted predecessor statute; Court revisits its mixed‑use analysis)
- Kimbrough v. Idaho Bd. of Tax Appeals, 150 Idaho 417, 247 P.3d 644 (Idaho 2011) (standard of review for district court factual findings and legal conclusions on tax appeals)
- Student Loan Fund of Idaho, Inc. v. Payette Cnty., 138 Idaho 684, 69 P.3d 104 (Idaho 2003) (statutory interpretation and charitable tax exemption as questions of law)
- St. Luke’s Reg’l Med. Ctr., Ltd. v. Bd. of Comm’rs of Ada Cnty., 146 Idaho 753, 203 P.3d 683 (Idaho 2009) (statutory interpretation begins with plain language)