Vacant Historic Building Qualified For Indiana Property Tax Exemption

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The Indiana Board of Tax Review applied a 100% exemption to a vacant historical building

The Indiana Board applied a 100% property tax exemption to a vacant historic building.

In Historic Landmarks Foundation of Indiana Inc. v. Vigo County Assessor, Pet. No. 84-002-11-2-8-02178 (June 10, 2014), a nonprofit Corporation claimed a 100% exemption on a property that was vacant on the March 1, 2011, assessment date.  The Corporation purchased a historic building on February 11, 2011, with the intention of preserving it while using it as a regional office.  Although the Corporation set up utility accounts for the property, began moving files into the property, and obtained an estimate for painting immediately upon buying the property, the Corporation had not fully moved into the property as of March 1st assessment date.  The Assessor therefore claimed that the Corporation did not meet the statutory requirements for exemption.

The Corporation claimed an exception under two statutes.  The first, Ind. Code § 6-1.1-10-16, exempts a building and the land it sits on if the building is owned, occupied, and predominantly used for, among other things, educational or charitable purposes.  The second, Ind. Code § 6-1.1-10-18, exempts tangible property from taxation if it is owned by an Indiana nonprofit corporation that is organized and operated for the primary purposes of promoting, housing or providing financial support to activities in the field of fine arts (which specifically includes the Corporation’s focus – architecture).  The fine arts-based exemption does not explicitly include an occupancy requirement – a fact that the Indiana Board points out. (Page 6, ¶ 18.)

Relying on the Indiana Tax Court’s reasoning in Trinity Episcopal Church v. State Bd. of Tax Comm’rs that a taxpayer’s actions in preparing a building for future exempt purposes may be sufficient to qualify for exemption under Ind. Code § 6-1.1-10-16, the Indiana Board found that the Corporation had taken concrete steps toward its intended use of the property for an exempt purpose.  (Page 6, ¶¶ 19-21) (694 N.E.2d 816, 818-19 (Ind. Tax Ct. 1998).)  Accordingly, the Corporation received a 100% exemption.  (Page 7, ¶ 22.)

Topics:  Property Tax, State Taxes, Tax Exemptions

Published In: Nonprofits Updates, Commercial Real Estate Updates, Tax Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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