Indiana Tax Court Upholds Property Tax Exemption For Early Learning Center

by Faegre Baker Daniels

Indiana Tax Court upholds property tax exemption for early learning center

On April 1, 2015, the Indiana Tax Court in Johnson County PTABOA and Assessor v. KC Propco LLC d/b/a Kindercare Learning Center affirmed the grant of a 100% real property tax educational purpose exemption for property used as an early learning center as of the March 1, 2009 assessment date.  KC Propco was the real estate acquisition and development arm for KinderCare Learning Centers.  In 2005, KC Propco bought the property and KinderCare Learning Centers renovated it.  Subsequently, KinderCare Learning Centers was acquired by Knowledge Learning Corporation.  In its final determination, the Indiana Board of Tax Review concluded that KC Propco and KinderCare Learning Centers each had its own exempt purpose.

Educational goals emphasizedDiscussing the educational programs conducted at the center, the Indiana Board noted that “[g]enerally, the pre-kindergarten curriculum was designed to develop and refine children’s cognitive, motor, language, and computer skills” and that the basic curriculum was adjusted to meet each child’s specific needs.  Educational goals and objectives were emphasized during before and after school programs.  The Board concluded that the property’s use as an “early learning center” was a qualified educational purpose because the programs offered were “a complement to and prepare children for enrollment in school by providing the foundational elements children need to thrive in more advanced programs.”

Court would not reweigh the evidenceThe Court explained the purpose of the educational purpose exemption “is to encourage non-governmental entities to provide educational services for the public welfare.”  Slip op. at 8 (citation, internal quotation omitted).   To qualify, the party seeking exemption must show that the property is owned, occupied and predominantly used to further the exempt purpose.  The PTABOA and Assessor argued that the administrative record lacked evidence showing who owned, occupied and used the property; they claimed that KC Propco (through the testimony of two witnesses) merely showed a “confusing corporate structure.”  But the Court could not reweigh the evidence or judge the credibility of witnesses on appeal.  Slip op. at 10 (citation omitted).  Because the Board “understood their testimony and determined it had probative value, the Court will not overturn that determination absent an abuse of discretion.”  Id.  To prove their case, the PTABOA and Assessor should have pointed to evidence showing that KC Propco did not own the property and that KinderCare Learning Centers did not occupy and use it.  In this case, no such evidence was in the record.  Moreover, the Court found that the record contained other evidence, including the property record card, showing the property’s ownership, occupation and use.  Slip op. at 11.

The PTABOA and Assessor also asserted that the evidence supported an “alternative conclusion” regarding the property’s use for educational purposes.  For example, the evidence indicated certain non-educational activities occurred on site and that only 25% of the teaching staff had college degrees.  Once again, the Court held that it could not reweigh the evidence. Slip op. at 12-13.  The Board’s ruling recognized that both educational and childcare activities took place at the center, but the focus was on the educational activities.  The Court explained:  “Here, it is clear that the Assessor simply disagrees with how the Indiana Board distributed the weight of the evidence.  Nonetheless, the Court will not now redistribute the weight in order to tip the scales in the Assessor’s favor.”  Slip op. at 13.

Entire parcel exempt. The Assessor further argued that if the improvements are exempt, then the entire 2.607 acre parcel should not be exempt – only the one acre supporting the building and parking lot.  But the exemption applied to the entire parcel, not just the land attributable to the building’s footprint.  Slip op. at 13-14.

Written by:

Faegre Baker Daniels

Faegre Baker Daniels on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.