Appeals Court Clarifies State Property Tax Exemption Statute after 2009
By org jforward wisbar Joe Forward, Legal Writer,
State Bar of Wisconsin
27, 2012 – A retirement home without a benevolent use is still
exempt from property taxes under a state exemption, according to a state
That is, nonprofit entities licensed, certified, or registered under
Wis. Stat. ch.
50, which governs the licensing procedures for care and service
residential facilities, hospitals, rural medical centers, and hospices,
don’t need to show benevolence to qualify for the exemption.
Wis. Stat. section 70.11(4)
states in pertinent part that property owned by “churches or
religious, educational, or benevolent associations, or by a nonprofit
entity that is operated as a facility that is licensed, certified, or
registered under ch. 50,” is exempt from property
Beaver Dam Community Hospitals Inc. runs the Eagle’s Wings
facility, a community-based residential facility for seniors that
operates under ch. 50. Despite the section 70.11(4) exemption,
the City of Beaver Dam assessed property taxes against the facility.
It argued that section 70.11(4) applies only to facilities that show a
benevolent use of the property. But in Beaver
Dam Community Hospitals Inc. v. City of Beaver Dam, 2011AP1479 & 2011AP2693 (Aug.
23, 2012), the District IV Wisconsin Court of Appeals disagreed.
Noting the case as one of first impression, the three-judge panel
concluded that following statutory revisions by the state Legislature in
2009, “Chapter 50 facilities owned by nonprofits are now a
distinct exempt category within the statute.”
It rejected Beaver Dam’s argument that the new statute creates
ambiguity as to whether ch. 50 entities must still
show benevolent use, and ambiguity should be resolved against the
taxpayer. But the appeals court found the statute to be unambiguously
clear on its face.
“The legislature established in the statute that Chapter 50
facilities owned by nonprofit entities are eligible for a statutory tax
exemption, regardless whether they are benevolent,” Judge
Blanchard wrote. “The wisdom or broader implications of this
policy choice was, and remains, for the legislature to decide.”