Facilities with current tax exemption must review their admissions materials and other documentation before the end of each year to ensure they are not in violation of the tax exemption requirements on January 1.
Entities considering remodeling or renovating, building a new building or an addition to a current building, or buying a new property should also be thinking ahead and planning for real property tax exemption now.
January 1 is a key date. Real property tax exemption is determined for each calendar year based on whether the entity was in compliance with the exemption requirements on January 1. Thus, it is very important that facilities with current tax exemption review their admissions materials and other documentation before the end of each year to ensure they are not in violation of the tax exemption requirements on January 1.
Most common reason for denial. The Tax Commissioner has taken a very strict approach in evaluating whether a skilled nursing facility or assisted living facility is in adherence with the requirements for real property tax exemption. The most cited reason for withdrawing or denying tax exemption as a home for the aged is that the entity fails to provide services for “the life of each resident without regard to the resident’s ability to continue payment for the full cost of the services.”
Do not trust prior approvals. In recent years, the Tax Commissioner has denied applications that included identical information and documentation that was previously acceptable for obtaining tax exemption. We have seen SNFs and RCFs denied tax exemption under these circumstances, resulting in expensive and time-consuming appeals and negotiations with the Tax Commissioner. Again, planning ahead is not only necessary, but can save you from losing years’ worth of tax exemption.
Make a tax plan now if planning new development. Any non-profit entity that may be considering remodeling or renovating, building a new building or an addition to a current building, or buying a new property should also begin thinking about what must be done to apply and be approved for real property tax exemption. Depending on the type of project, your ability to tax exemption may be decided before you even begin renovations or remodeling. It is necessary to incorporate tax exemption discussions into your planning early on.
It is important for non-profit SNFs and RCFs to work with legal counsel to review current information and documentation to ensure continued compliance with the requirements for real property tax exemption. It is equally important for non-profits to begin consulting with legal counsel now if they foresee any construction, addition, renovation, or purchase within the next calendar year. Timing is critical, and a failure to ensure compliance or prepare for an application could result in the property being assessed taxes for an entire year or more.
ROLF has had great success in obtaining real property tax exemption for non-profit SNFs and ALFs throughout Ohio, and would be happy to review for continued compliance or assist in preparing an exemption application. Since ROLF has submitted numerous successful applications in recent years, saving our clients hundreds of thousands of dollars in taxes, we are now pleased to offer our assistance with tax exemption applications at a flat rate fee.
Please note that this post is intended to be informational only, and is not intended to be nor should it be relied upon as legal advice. Rolf Goffman Martin Lang LLP will not be responsible for any actions taken or arrangements structured based upon this post. The receipt or review of this post by an organization that is not a current client of Rolf Goffman Martin Lang LLP does not create an attorney-client relationship between the recipient and the law firm.
To engage the legal services of ROLF, please contact the firm at (866) 495-5608.
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