Summary
The Nebraska Supreme Court affirmed the denial of St. Monica's application for a property tax exemption. The court held that Nebraska law requires exempt use to be determined as of the application date, and St. Monica's intended future charitable use of the property did not satisfy that requirement. The court also held that ownership alone was not evidence of exempt use and that St. Monica's would have needed to reapply after the property was put to an exempt use.
Topics
Practice areas
Questions Presented
- Whether TERC erred in upholding the denial of St. Monica's application for a 2005 property tax exemption when the property was not being used for an exempt purpose on the application date.
- Whether St. Monica's later acquisition of building permits and subsequent use of the property eliminated the need to file a new exemption application.
Holdings
- A property's intended future use for an exempt purpose is not itself an exempt use under Nebraska's property-tax-exemption statute. Because St. Monica's property was not being used exclusively for an exempt purpose on March 28, 2005, its application for the 2005 tax year was properly denied.
- Ownership of the property is not evidence of exempt use, and later obtaining building permits or beginning exempt use did not excuse St. Monica's from filing a new exemption application. Any later exemption had to be considered anew based on the property's use as of the date of a new application.
Key quotations
“This court has consistently held that the "intention to use property in the future for an exempt purpose is not a use of the property for [exempt] purposes."” (607)
“The ownership of property is not evidence of use under the statute.” (607)
Factual background
St. Monica's, a Nebraska nonprofit corporation providing charitable substance-abuse and mental-health treatment for women, purchased property in Lincoln on March 15, 2005, intending to convert it into treatment, outpatient, and administrative facilities. It applied for a property tax exemption on March 28, 2005, when the property was not yet occupied or otherwise being used for the claimed charitable purposes. Although it obtained building permits on July 21 and began occupying the property in October, it did not reapply for the 2005 exemption.
Procedural history
St. Monica's applied for a property tax exemption on March 28, 2005, but the Lancaster County Board of Equalization denied the application because the property was not then being used for an exempt purpose. St. Monica's later obtained building permits and began occupying the property in October 2005, but the record did not show that it reapplied for an exemption for the 2005 tax year. After an earlier jurisdictional dismissal was summarily reversed, the matter was submitted to TERC without a hearing, and TERC upheld the Board's decision on September 12. St. Monica's appealed to the Nebraska Supreme Court, which affirmed.