The County Board of Equalization in St. Louis, Missouri has authorized St. Louis County Assessor Jake Zimmerman to re-examine all tax-exempt properties across the county. Whether Zimmerman, or any other authority, has the power to revoke exemptions is still unclear, and this is the first time the county will review a tax exemption after it has been granted. While Zimmerman conducts the “periodic reviews,” his primary focus includes upscale nonprofit senior living complexes in Kirkwood, Webster Groves and other communities.
According to the St. Louis Post-Dispatch, an investigation by the publication last month found that without tax exemptions granted years ago by the County Council, properties owned by two nonprofits – Bethesda Health Group and Lutheran Senior Services — would have paid $3.1 million in real estate property taxes last year. Although the luxury senior complexes are considered “nonprofit”, the investigation raised a lot of questions regarding the classification. Entry fees for independent living apartments run as high as $379,000, with monthly service fees greater than $2,000. And salaries paid to executives of Bethesda and Lutheran totaled $1.6 and $1.4 million respectively in 2011. Bethesda executives also received country club memberships totaling nearly $37,000. The investigation concerned Zimmerman (as well as many St.Louis county residents), prompting the re-evaluation. However, he said all tax-exempt properties will be re-evaluated, not just senior housing.
In Missouri, a taxpayer must prove why his property should not be taxed. State law says property used for “purely charitable” purposes can be exempt from taxation, according to the Post-Dispatch. Missouri Supreme Court in 1978 set up a three-pronged test for exemption. To qualify, a property must not be operated for profit. It must be dedicated exclusively to a charitable purpose — for example, to counsel, to educate, or to heal. And the use must primarily “benefit an indefinite number of people.” Zimmerman said that properties that don’t meet every criteria of that test should not still be getting tax breaks. He will be seeking advice from lawyers representing the Board of Equalization and City Council about how to go forward with the review of tax-exempt statuses.
For the full article from the St. Louis Post-Dispatch, click here.