EVANGELICAL LUTHERAN GOOD SAMARITAN SOCIETY, Petitioner-Respondent,
BOARD OF EQUALIZATION OF ADA COUNTY, Respondent-Appellant.
Opinion No. 152
from the District Court of the Fourth Judicial District of
the State of Idaho, Ada County. Hon. Steven J. Hippler,
judgment of the district court is reversed.
County Prosecuting Attorney, Boise, for appellant. Gene Petty
Greener Burke Shoemaker Oberrecht, P.A., Boise, for
respondent. Phillip S. Oberrecht argued.
an appeal from the district court's ruling granting
Evangelical Lutheran Good Samaritan Society (Society) a
charitable property tax exemption. The Board of Equalization
of Ada County (Ada County) appeals from the district
court's decision holding that Society qualified for a
charitable property tax exemption under Idaho Code section
63-602C. We reverse.
FACTUAL AND PROCEDURAL BACKGROUND
is incorporated under the laws of North Dakota and has
authority to conduct business in Idaho. Society is recognized
as a tax exempt organization under Section 501(c)(3) of the
Internal Revenue Code and a public charity pursuant to
Section 509(a)(2). Society operates about 240 elder care
facilities in 24 states. Society operates four facilities in
Village is a 96-bed skilled nursing facility located in Ada
County. In 1958, Society assumed ownership of Boise Village.
Boise Village is one of ten skilled nursing facilities in
Boise. Boise Village operations are similar to those of
commercial nursing facilities in the area. During the
relevant time period, Boise Village expected all residents to
pay for the services they received. Boise Village charges
rates comparable to those charged at local skilled nursing
facilities. Boise Village has never admitted a resident
knowing that resident would not be able to pay.
receives donations to help operate Boise Village. Boise
Village received unrestricted gifts of $72, 209 in 2012 and
$39, 206 in 2013. The amount of donations is small in
comparison with Boise Village's operating revenue for
that time. In 2012, Boise Village had operating revenue of
$9, 769, 537 and $9, 836, 951 in 2013. The vast majority of
Boise Village's operating revenue came from government
programs such as Medicaid, Medicare and the Veterans
Administration. For the years 2011-2013 Boise Village
received 87%, 90%, and 94% of its operating revenue from
state and federal programs respectively. In 2012, Boise
Village earned a profit of $49.84 per Medicaid resident per
day, amounting to $18, 191.60 per Medicaid resident annually.
who are admitted to Boise Village are required to sign an
admissions agreement in which the residents promise to pay
for care and agree to late charges if their bill is more than
10 days overdue. For overdue accounts, Boise Village and
Society each manage a collection team which operates similar
to collection teams at commercial facilities. In 2012, Boise
Village filed one lawsuit to collect on a bill but did not
file any suits in 2013. Boise Village granted charitable
allowances of $31, 281.88 and $7, 004.75 in 2012 and 2013
respectively for residents who were unable to pay through no
fault of their own. These charitable allowances were given
only after services had been provided and Society determined
that it would be unable to collect the debt.
Village also has an active volunteer program and relies
heavily on volunteers for its activities program. Boise
Village recorded 12, 707.25 volunteer hours in 2012 and 10,
053.15 in 2013. Even though volunteers help with activities,
they do not reduce staffing or the amount charged to
residents at Boise Village.
received charitable and religious property tax exemptions for
Boise Village until 2012. Ada County denied Society's
application for a tax exemption for Boise Village in 2012.
Society appealed and the Idaho Board of Tax Appeals upheld
Ada County's decision. Ada County again denied
Society's application for 2013. Society appealed directly
to the district court where the two cases were consolidated.
Society then applied for a tax exemption for 2014 which was
also denied. The parties stipulated that the outcome of the
case regarding 2012 and 2013 would also apply to 2014.
Following a six-day trial, the district court found that
Society qualified for a full property tax exemption as a
charitable organization and for a 12.3% property tax
exemption as a religious organization. Ada County timely
appealed the district court's ruling that Society
qualified for a charitable tax exemption but has not appealed
the finding that Society was eligible for a partial religious
STANDARD OF REVIEW
of requirements for charitable exemption from property tax
are questions of law over which this Court exercises free
review." Housing Southwest Inc. v. Washington
Cnty., 128 Idaho 335, 337, 913 P.2d 68, 70 (1996)
(citing Owyhee Motorcycle Club, Inc. v. Ada Cnty.,
123 Idaho 962, 964, 855 P.2d 47, 49 (1993)). "Statutes
granting tax exemptions must be strictly construed against
the taxpayer and in favor of the state." Id. at
337-38, 913 P.2d at 70- 71. "Exemptions are never
presumed; nor can a statute granting a tax exemption be
extended by judicial construction to create an exemption not
specifically authorized." Id. at 338, 913 P.2d
only issue on appeal is whether Society qualifies for a
property tax exemption under Idaho Code ...