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Columbus Bd. of Edn. v. Tracy, 73 Ohio St.3d 75, 652 N.E.2d 661, 1995 -Ohio- 213

Facts

The property at issue is located at 340 East Town Street, Columbus, Ohio, and consists of a three-story building with additional floors built above it. Grant Medical Center, a nonprofit corporation, occupied the original three floors, while the airspace above was transferred to Franklin Health Corporation, which constructed a seven-story addition. The Columbus Board of Education filed a complaint regarding the tax-exempt status of the property, leading to a determination by the Tax Commissioner that the original three floors were tax exempt, while the additional floors were taxable. The Board of Tax Appeals affirmed this decision.

In 1990, the Columbus Board of Education ('the board') filed a complaint concerning the 'exempt status of a portion of the aforementioned permanent parcels which contain an office building and health club above a high-rise parking lot at the Grant Medical Center.'

Issue

The main legal issue is whether the land and the original three floors of the building can be considered tax exempt when part of the building (the top seven floors) is used for nonexempt purposes.

The only issue for determination is the tax status of the land on which the ten-story building is located.

Rule

Real and tangible personal property belonging to institutions that is used exclusively for charitable purposes shall be exempt from taxation, as per R.C. 5709.12(B).

R.C. 5709.12(B) provides in part: 'Real and tangible personal property belonging to institutions that is used exclusively for charitable purposes shall be exempt from taxation.' (Emphasis added.)

Analysis

The court analyzed the separate ownership of the land and the first three floors from the top seven floors, concluding that the tax status of each estate must be determined separately. The court referenced previous cases that established the principle that separate estates can exist within the same structure, and since the land and first three floors were used exclusively for charitable purposes, they qualified for tax exemption despite the nonexempt use of the upper floors.

The contention of the board is flawed because it fails to recognize that the ownership of the land and first three floors of the building was separate and distinct from the ownership of the top seven floors.

Conclusion

The court affirmed the decision of the Board of Tax Appeals, holding that the land and the original three floors were exempt from taxation.

For the foregoing reasons, we affirm the decision of the Board of Tax Appeals.

Who won?

Grant Medical Center prevailed in the case because the court found that the land and the first three floors were used exclusively for charitable purposes, thus qualifying for tax exemption.

Accordingly, we affirm the decision of the BTA.

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