ATTORNEY FOR PETITIONER: ATTORNEYS FOR RESPONDENT:
AMY K. NOE STEVE CARTER
ARNOLD & NOE, LLP ATTORNEY GENERAL OF INDIANA
Richmond, IN Indianapolis, IN
TED J. HOLADAY
DEPUTY ATTORNEY GENERAL
INDIANA TAX COURT
RICHMOND GYMNASTICS TRAINING )
CENTER, INC., )
v. ) Cause No. 49T10-0112-TA-100
DEPARTMENT OF LOCAL GOVERNMENT )
ON APPEAL FROM A FINAL DETERMINATION
OF THE STATE BOARD OF TAX COMMISSIONERS
NOT FOR PUBLICATION
December 11, 2003
The Petitioner, Richmond Gymnastics Training Center, Inc. (RGTC), appeals the final determination of
the State Board of Tax Commissioners (State Board) denying its application for a
property tax exemption for the 2000 tax year.
The issue for
the Court to decide is whether RGTC is entitled to the educational purposes
exemption as provided by Indiana Code § 6-1.1-10-16.
For the reasons stated below, the Court finds that RGTC is entitled to
the exemption and therefore REVERSES and REMANDS the final determination of the State
FACTS AND PROCEDURAL HISTORY
RGTC is a gymnastics training facility that offers classes and private lessons to
children. (Petr Br. at 1-2.) RGTCs facility is a one-story improvement
located in Wayne County, Indiana. The improvement contains a gymnasium, office, and
On March 1, 2000, RGTC filed an application for the educational purposes property
tax exemption with the Wayne County Property Tax Assessment Board of Appeals (PTABOA).
After an administrative hearing, the PTABOA denied the application. On August
24, 2000, RGTC filed a Form 132 Petition for Review of Exemption with
the State Board. On February 26, 2001, the State Board held a
hearing on RGTCs exemption petition. On November 1, 2001, the State Board
affirmed the PTABOAs determination.
On December 18, 2001, RGTC filed an original tax appeal. The parties
submitted briefs and this Court heard oral arguments. Additional facts will be
supplied as needed.
ANALYSIS AND OPINION
Standard of Review
This Court gives great deference to the final determinations of the State Board
when it acts within its authority. Wetzel Enters., Inc. v. State Bd.
of Tax Commrs, 694 N.E.2d 1259, 1261 (Ind. Tax Ct. 1998). This
Court will reverse a final determination by the State Board only when its
findings are unsupported by substantial evidence, are arbitrary or capricious, constitute an abuse
of discretion, or exceed statutory authority. Id.
To qualify for the educational purposes exemption, a taxpayer must demonstrate that the
of its property is educational. See State Bd. of Tax
Commrs v. New Castle Lodge #147, Loyal Order of Moose, Inc., 765 N.E.2d
1257, 1259 (Ind. 2002)(footnote added). RGTC argues that because it teaches courses
in gymnastics, the predominant use of its property is educational. (See Petr
Br. at 1,7.) RGTC is correct.
This Court has held that the educational use of a property can
be found if public benefits accrue from the use. See Trinity Sch.
of Natural Health, Inc. v. Kosciusko County Prop. Tax Assessment Bd. of Appeals,
No. 49T10-0203-TA-36, slip op. at 5-6 (Ind. Tax Ct. December 11, 2003).
In Trinity, this Court rejected the argument that in order to qualify for
the educational purposes exemption, a taxpayer must offer classes that are identical to
those offered by Indianas tax-supported schools. See id. The PTABOA advances
the same argument in this case. (See Respt Br. at 9.)
Accordingly, the PTABOAs argument fails.
Though offering a class that is identical to one taught in tax-supported schools
would qualify a taxpayer for the exemption, a taxpayer need only relieve the
States burden of providing education to some limited extent with courses that are
merely related to those found in tax-supported schools. See Trinity, slip op.
at 5-6 (emphasis added). As this Court held in Trinity:
the present benefits test can be met by providing courses found in tax-supported
schools, or by providing courses that are related to those found in tax-supported
public schools, but not necessarily provided. Indeed, taxpayers that fill an educational
void can relieve the States burden by adding a new course of study
as much as they can by providing a program that is a direct
analogue to classes taught in Indianas tax-supported schools and universities.
Id. (internal footnotes and citation omitted). CONCLUSION
While this Court recognizes that physical education is taught in tax-supported schools, it
is not necessary to qualify gymnastics classes as equivalent to a course taught
in tax-supported schools. Rather, gymnastics courses are related to physical education classes
taught in tax-supported schools. Because RGTCs gymnastics courses accomplish similar objectives to
those of physical education classes provided in tax-supported schools, this, to some limited
extent, relieves the States burden. See id. Therefore, RGTCs application
for an education purposes exemption was erroneously denied.
The State Boards denial of RGTCs exemption petition was an abuse of discretion
and otherwise not in accordance with law. Thus, for the foregoing reasons,
the State Boards final determination is REVERSED and REMANDED to the Indiana Board
of Tax Review
See footnote to instruct the local assessing officials to grant the exemption.
Footnote: The State Board of Tax Commissioners (State Board) was originally the Respondent
in this appeal. However, the Legislature abolished the State Board as of
December 31, 2001. 2001 Ind. Acts 198 § 119(b)(2). Effective January
1, 2002, the Legislature created the Department of Local Government Finance (DLGF), and
the Indiana Board of Tax Review (Indiana Board).
Ind. Code §§ 6-1.1-30-1.1
(West Supp. 2003)(eff. 1-1-02); 6-1.5-1-3 (West Supp. 2003)(eff. 1-1-02); 2001 Ind. Acts 198
§§ 66, 95. Pursuant to Indiana Code § 6-1.5-5-8, the DLGF is
substituted for the State Board in appeals from final determinations of the State
Board that were issued before January 1, 2002. Ind. Code § 6-1.5-5-8
(West Supp. 2003)(eff. 1-1-02); 2001 Ind. Acts 198 § 95. Nevertheless, the
law in effect prior to January 1, 2002 applies to these appeals.
I.C. § 6-1.5-5-8. See also 2001 Ind. Acts 198 § 117.
Although the DLGF has been substituted as the Respondent, this Court will still
reference the State Board throughout this opinion.
All or part of a building is exempt from property taxation
if it is owned, occupied, and used by a person for educational, literary,
scientific, religious, or charitable purposes.
Ind. Code § 6-1.1-10-16(a).
he educational purposes exemption will be denied when educational training . .
. [is] merely incidental to [ ] recreational and hobby activities.
Natl Assn of Miniature Enthusiasts v. State Bd. of Tax Commrs, 671 N.E.2d
218, 222 (Ind. Tax Ct. 1996). See also State Bd. of Tax
Commrs v. Ft. Wayne Sports Club, Inc., 258 N.E.2d 874, 882 (Ind. Ct.
App. 1970) (rejecting an educational purposes exemption for a club that taught soccer
classes and conducted soccer leagues on the basis that its educational use was
incidental to its predominant use as a social club.)
All cases that would have been remanded to the State Board are
now remanded to the Indiana Board of Tax Review (Indiana Board).
Code § 6-1.1-15-8 (West Supp. 2003). Final determinations made by the Indiana
Board are subject to review by this Court pursuant to Ind. Code §
6-1.1-15. Ind. Code §§ 6-1.5-5-7 (West Supp. 2003); 3-33-5-2.