In Housing Partnerships, Inc. v. Tom Owens, Bartholomew County Assessor, Pet. No. 49T10-1005-TA-23 (June 6, 2014), Taxpayer owned several individual homes, duplexes and small apartment buildings.  The properties were rented to persons with annual incomes at or below 60% of the area median income.  For the March 1, 2006, assessment date, Taxpayer requested a property tax exemption for its properties, claiming a charitable purpose exemption because they were used to provide low income housing.  The local Property Tax Assessment Board of Appeals (PTABOA) and the Indiana Board of Tax Review denied the exemption.  According to the Indiana Board, Taxpayer failed to establish a prima facie case that its properties should be exempt, and it did not explain what terms and conditions were attached to significant federal grants received for the properties.

The charitable exemption standard. Taxpayer was required to show that its property was owned, occupied and predominantly used for a charitable purpose to be exempt.  See Ind. Code § 6-1.1-10-16.  For its properties to be exempt, Taxpayer had to submit probative evidence showing two things:  (1) “its ownership, occupation, and use of the subject properties as low-income housing provided evidence of relief of human want manifested by obviously charitable acts different from the everyday purposes and activities of man in general” and (2) “through the accomplishment of those charitable acts, benefit inures to the public sufficient to justify the loss of tax revenue.”  Slip op. at 5 (internal quotations, citations omitted).

Being a “good landlord” wasn’t enough.   Taxpayer claimed that testimony in the record proved that its properties were used to provide low-income individuals in distressed areas with “clean, safe and secure housing . . . at affordable and below-market rents” and with services and support designed “to assist them in becoming self-sufficient and productive members of the community.”  Slip op. at 6.  The Indiana Board concluded that the evidence (showing, among other things, Taxpayer’s paying for tenants to attend at least one credit counseling session) did show Taxpayer to be a “good landlord” that did some “nice things” for tenants.  Slip op. at 8.  However, that was not enough to show the properties qualified for exemption.  Id.  The Tax Court observed:  “The Indiana Board’s conclusion that a taxpayer must show more than just good deeds and a nonprofit status is supported by this Court’s case law.” Id.  Taxpayer provided only conclusory assertions – not evidence showing that it lessoned the government’s financial burden.  Slip op. at 10.  Taxpayer offered no evidence showing that it “relieved the government of an expense it would otherwise have borne, or whether the government, through its federal grants, was still bearing the expense itself.”  Slip op. at 12.  The Indiana Board hadn’t ignored Taxpayer’s evidence; rather, it weighed the evidence and concluded that it failed to demonstrate that its properties qualified for Indiana’s charitable purpose exemption. Slip op. at 10, 12.