Opinion ID: 2221626
Heading Depth: 1
Heading Rank: 4

Heading: General Principles Governing Property Tax Exemptions.

Text: The Center's request for an exemption from property taxation is based on Iowa Code section 427.1(8): The following classes of property shall not be taxed: ... 8. Property of religious, literary and charitable societies. All grounds and buildings used or under construction by literary, scientific, charitable, benevolent, agricultural, and religious institutions and societies solely for their appropriate objects, not exceeding three hundred twenty acres in extent and not leased or otherwise used or under construction with a view to pecuniary profit. Authority for a partial tax exemption is found in section 427.1(14): The assessor, in arriving at the valuation of any property of the society or organization, shall take into consideration any uses of the property not for the appropriate objects of the organization and shall assess in the same manner as other property, all or any portion of the property involved which is leased or rented and is used regularly for commercial purposes for a profit to a party or individual. If a portion of the property is used regularly for commercial purposes an exemption shall not be allowed upon property so used and the exemption granted shall be in the proportion of the value of the property used solely for the appropriate objects of the organization, to the entire value of the property. Iowa Code § 427.1(14) para. 2 (emphasis added). We strictly construe these statutes and any doubt about an exemption is resolved in favor of taxation. Care Initiatives, 500 N.W.2d at 16-17. This court has repeatedly held that an entity must prove the following three factors by a preponderance of the evidence to establish the tax-exempt status of its property: (1) [the entity] was a charitable institution at the time of the claimed exemption, (2) [the entity] did not operate [the facility] with a view to pecuniary profit, and (3) the actual use of [the facility] was solely for the appropriate objects of the charitable institution. Partnership for Affordable Housing, 550 N.W.2d at 164. See generally Care Initiatives, 500 N.W.2d at 17 (stating that party claiming the exemption has the burden of proof). Because the Board granted a partial exemption to the Center, it necessarily found that the Center was a charitable institution at the time it claimed exempt status. Due to the fact that the assessor filed no appeal from the Board's decision, we accept for purposes of our review that the Center qualifies as a charitable institution under chapter 427. See Aerie 1287, 226 N.W.2d at 25 (concluding that board's allowance of a partial exemption obviated need on appeal to determine whether the taxpayer qualified as a charitable organization). With respect to the second factor, the Board concedes in its brief that the Center is not operated with a view towards pecuniary profit. That brings us to the third factorwhether the actual use of the Center's day care facility was solely for the appropriate objects of the institution. By virtue of the fact that the Board allowed a partial exemption, it obviously concluded that at least a portion of the facility was employed for appropriate charitable purposes, namely the care of children. Thus, the only issue in contention on this appeal is the extent to which the day care center was actually used for this charitable object.