Revenue Cabinet: Grand Campus should be tax exempt
This from the
Richmond Register:
The state Revenue
Cabinet filed a brief Tuesday with the state Board of Tax Assessment
Appeals saying the Madison County Property Valuation Administrator and
the county assessment appeals board failed to follow its “direction and
advice” in denying tax exemption to the Grand Campus residential
property leased by Eastern Kentucky University.
Several
statutes require PVAs and local assessment appeals board to follow the
Revenue Department’s advice in assessing value and granting exemptions,
the brief states.
It
adds that “property owned and occupied by … an institution of education
not used or employed for gain by any person or corporation” is exempt
from taxes.
The
department reviewed EKU’s lease before drafting its July 2014 opinion,
copies of which were provided to both the university and the PVA. And
the PVA’s denial of exemption was in “direct contravention” of the the
department’s advice, the brief adds.
Built
by private developers and leased to the university, EKU would pay more
than $253,000 to local taxing entities this year on assessed value of
$26 million if it is not exempt. The university’s lease requires it to
pay any taxes on the property.
Local
assessment board members, in denying the exemption, said a July 2014
Revenue Department letter to EKU and a July 16 conference call with the
county board expressing an “opinion” did not qualify as the “advice”
that state law required it to follow. The department “declined to make
judicial determination,” according to the local board’s written
decision.
The
board also agreed with Jerry Gilbert, the attorney for both the county
school and library boards, that EKU’s agreement with the Grand Campus
owners resembles a conventional triple net lease.
Madison
County PVA Billy Ackerman said he denied the exemption because he
received no direct instructions from the Revenue Department, and he
could find no reason in the state’s manual for PVAs to grant the
exemption.
After
the county assessment appeals board denied the exemption following a
July 17 public hearing, EKU took its case to the state appeals board.
The university’s
appeal states that unlike a conventional lease, its lease gives it an
“equitable interest” in the property, if not outright ownership.
If
the state board refuses to grant the exemption, the Revenue
Department’s brief states the Grand Campus property should be assessed
at $28.5 million. That was Ackerman’s original assessment, which was
lowered to $26 million by the county assessment appeals board.
The
school and library boards have already authorized its attorney to take
the issue to a court of law if administrative appeals fail.
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