August 17, 2010; Source: WRBL | There is a property tax battle concerning nonprofits almost daily. Today’s is from Columbus, Ga., where the lesson is that property tax exemptions are based on present and intended future use.
The nonprofit Medical Center Authority owns a continuing care community called Spring Harbor. In 2007, the Columbus Board of Tax Assessors told the Hospital Authority that the fair market value of the facility when construction started would be around $8 million, but with construction completed, the assessors set the market value at $53 million. Rather than appealing the assessment, the Authority claimed that the Spring Harbor continuing care community should be treated as tax exempt under a provision of Georgia state law that makes any property of a “home for the aged” tax exempt.
The City doesn’t agree. Citing “initiation dues and condominium fees,” the City attorney suggests that the facility doesn’t seem to be acting like a “normal retirement home” and wonders whether the authority is actually holding the property for investment. The case will be heard in Superior Court.
For us, it raises the following questions: Although a nonprofit doesn’t have to lose money to be a nonprofit, just how nonprofit is this condominium continuing care community? Why didn’t the Hospital Authority raise this issue when the property was first assessed at $8 million (or did the nearly seven times higher assessment prompt a reconsideration of the home’s tax status)? If the Columbus tax assessors are concerned about the Hospital Authority’s future utilization of the property, shouldn’t the Authority show the assessors and the Court its business plan for the use of the site and confirm its future use as a nonprofit-qualified continuing care community?—Rick Cohen