Wednesday, April 21, 2010

Ohio High Court Says No Tax Exemption For Church's Low-Income Apartments

In NBC-USA Housing, Inc.–Five v. Levin, (OH Sup. Ct., April 12, 2010), the Ohio Supreme Court held that a federally subsidized apartment complex for low-income tenants operated by the National Baptist Convention (NBC) and a local church does not qualify for the property tax exemption under Ohio Rev Code 5709.12(B). That section exempts property used exclusively for charitable purposes. The court relied on "the consistent and longstanding doctrine that a distinctly residential use of real property defeats a claim of charitable exemption, even where attendant circumstances indicate the existence of charitable motives." It is not enough that NBC was carrying out a religious mission. The exemption depends on the use of the property, not the nature of the charitable institution that owns it. The argument for an exemption under a different section of the Ohio statutes was precluded because it was not properly raised on appeal.