Exempt Charities or . . . vacation spots?

The line between an exempt charity and a commercial business has grown ever murkier in our society.  Nonprofit hospitals offer services and operate much like for-profit counterparts, down to using debt collection agencies for past due bills.  Universities raise tuition, build hotels and “research parks,” and race to form research partnerships with for-profit entities while shoveling billions into endowments.  But a recent trio of state exemption cases may best describe the tension between what is a charity and what is a commercial business.  In McDuffie County, Georgia, the local property tax assessors are challenging exemption for Fountain Campground, which claims exemption for some 70 acres of land as a site of religious worship – except that the land appears to be fenced, with posted no-tresspassing signs, and is regularly used as a hunt club.  In the Davenport, Iowa, area, local bars and music clubs are claiming unfair competition from River Music Experience, an exempt charity which offers live music acts in its Redstone Room performing venue.  And in Cape May, New Jersey, an order of nuns is seeking tax exemption for property they claim is a religious retreat: three buildings with 160 rooms overlooking the Atlantic Ocean.  Local officials opined that “some of the retreats sound a lot like vacations.”