Charity Entitled to Exemption for Apartment Leased to Individual

Tax Analysts’ State Tax Today (subscription required) reports an interesting decision of the Ohio Board of Tax Appeals. In Talbert Services, Inc. v. Testa, an outpatient clinic provided assessment, treatment, case management, and referral services for clients suffering from substance abuse and mental health disorders on property that included an apartment.  When the clinic bought the property in 2008, an individual lived in the apartment, and he continued to do so for several years.  The Tax Commissioner denied property tax exemption for the apartment on the grounds that it was not used for charitable purposes because it was leased to an individual.  Reversing this determination, the Ohio Board of Tax Appeals found that the apartment was used by for charitable purposes.  It accepted testimony that, although the tenant was not an official client of the clinic, a director “provided one-on-one informal counseling and referral services to the tenant, just as [the clinic] … provided to its other clients.”  Further, the clinic did not lease the apartment with a view to profit, but merely used the rent to cover its expenses.  

The electronic citation of this decision is 2013 STT 223-22.
 

JRB