Friday, December 14, 2012

Maine: Limit to Incidental Commercial Use for Property Tax Exemption?

As reported by the Nonprofit Quarterly, a Maine court is set hear a case where the town of Hebron is arguing that the nonprofit boarding school, Hebron Academy, owes property taxes on income-generating uses of its facilities (i.e., rentals to outside groups for events).  The argument ultimately comes down to an extent issue, with the town arguing that there is too much non-school use of the Academy's ice rink and other facilities, resulting in them becoming "taxable venues."  Interestingly, Maine's incoming Attorney General has filed a brief supporting the Academy.

The case could provide a persuasive bright-line threshold for when commercial use of nonprofit property rises to a level exceeding "incidental," and thus becomes taxable.

[See a more extensive article in the Portland Press Herald]

NAM

http://lawprofessors.typepad.com/nonprofit/2012/12/maine-limit-to-incidental-commercial-use-for-property-tax-exemption.html

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