Starke County Assessor v. Porter-Starke Services, Inc., 71T10-1701-TA-2

Background

Porter-Starke Services, Inc. is a 501(c)(3) nonprofit and certified Community Mental Health Center (CMHC) that owned an 8,239 sq. ft. medical building on 1.147 acres in Starke County; 1,591 sq. ft. was leased to a third party in 2015.
Porter-Starke provided outpatient and related mental-health/addiction services to patients of all ages, operated under unpaid board oversight, employed licensed clinicians, accepted fees on a sliding scale, and did not deny care for inability to pay.
It received county, state, and federal funding and was subject to state oversight and audits as a CMHC, but its CFO testified it would continue services without public funding.
Porter-Starke applied for a 100% charitable purposes property-tax exemption for 2015; the PTABOA denied it and the Indiana Board of Tax Review granted an 81% exemption (excluding the leased portion) after a hearing.
The Starke County Assessor appealed the Indiana Board’s decision to the Indiana Tax Court, arguing (1) the Board erroneously treated CMHC status as a per se exemption and (2) the Board’s finding of sufficient public benefit was unsupported by substantial evidence.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether CMHC status or 501(c)(3) status creates a per se charitable exemption	Assessor: CMHC/501(c)(3) status should not relieve taxpayer of proving charitable financial operations; Grandview implies near-per-se treatment for certain nonprofit care providers	Porter-Starke/Board: No per se rule claimed; exemption must be decided on the facts and evidence of charitable use and public benefit	Court: No per se exemption; Board did not treat CMHC status as per se and applied fact-specific analysis; affirmed
Whether substantial and reliable evidence supports finding of public benefit sufficient to justify tax revenue loss	Assessor: Evidence is speculative; receipt of public funding undermines claim that Porter-Starke relieves governmental burden	Porter-Starke/Board: Evidence shows Porter-Starke relieves governmental burden (access deficit in county, sliding-scale fees, indigent care, cooperation with law enforcement); receipt of grants does not preclude exemption if taxpayer shows relief beyond grants	Court: Record contains more than a scintilla of evidence that Porter-Starke lessened government burden and provided public benefit; Board’s finding supported and affirmed

Key Cases Cited

Marineland Gardens Cmty. Ass’n v. Kosciusko Cnty. Assessor, 26 N.E.3d 1087 (Ind. Tax Ct.) (deference to Indiana Board when acting within authority)
Hamilton Cnty. Prop. Tax Assessment Bd. of Appeals v. Oaken Bucket Partners, LLC, 938 N.E.2d 654 (Ind.) (general taxability principle)
Jamestown Homes of Mishawaka, Inc. v. St. Joseph Cnty. Assessor, 914 N.E.2d 13 (Ind. Tax Ct.) (charitable exemption is fact-specific; no bright-line tests)
Trinity Episcopal Church v. State Bd. of Tax Comm’rs, 694 N.E.2d 816 (Ind. Tax Ct.) (ownership, occupancy, and use required for exemption)
Indianapolis Elks Bldg. Corp. v. State Bd. of Tax Comm’rs, 251 N.E.2d 673 (Ind. Ct. App.) (broad constitutional understanding of charitable purpose)
Tipton Cnty. Health Care Found., Inc. v. Tipton Cnty. Assessor, 961 N.E.2d 1048 (Ind. Tax Ct.) (charitable act plus public benefit required)
Knox Cnty. Prop. Tax Assessment Bd. of Appeals v. Grandview Care, Inc., 826 N.E.2d 177 (Ind. Tax Ct.) (context for nonprofit elder-care exemption analysis)
Housing P’ships, Inc. v. Owens, 10 N.E.3d 1057 (Ind. Tax Ct.) (receipt of public grants does not automatically preclude exemption; taxpayer must show relief beyond grants)
Housing P’ships, Inc. v. Owens, 17 N.E.3d 403 (Ind. Tax Ct.) (rehearing decision relevant to funding/evidence issues)
College Corner, L.P. v. Dep’t of Local Gov’t Fin., 840 N.E.2d 905 (Ind. Tax Ct.) (private organization relieves government burden = public benefit)
DeKalb Cnty. Assessor v. Chavez, 48 N.E.3d 928 (Ind. Tax Ct.) (substantial evidence standard defined)
Kildsig v. Warrick Cnty. Assessor, 998 N.E.2d 764 (Ind. Tax Ct.) (court will not reweigh evidence on appeal)