Recently a charity purchased property to use as a part of its charitable programming. Unfortunately, it was not permitted to apply for a property tax exemption that year because the property sale closed after the May 15th deadline to apply for the tax exemption. The county assessor subsequently issued a more than $25,000.00 property tax bill. The property already had a property tax exemption, but the assessor claimed the purchase destroyed the exemption because there was now a new owner, despite the fact that the use was still charitable.
The charity wound up getting the matter resolved with the assistance of an attorney, but a better potential fix would actually be legislative. A very simple sub-section could be added to IC § 6-1.1-10-16 allowing a charity that acquires property in a calendar year to apply for the property tax exemption on May 15th, or within 90 days of the acquisition, whichever is later.
Brent Auberry of Faegre, Baker & Daniels (M) came to a similar conclusion in February, 2014, stating “Nonprofits May Be Able to Find ‘Lost’ Property Tax Exemptions” through a legislative option.
Sometimes the legal solution is the best one. Other times, resources and time can be saved if an equitable legislative solution can be identified and achieved.