Group Homes Were Not Charitable

Cozen O'Connor
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A panel of the Commonwealth Court of Pennsylvania held that group homes maintained by a nonprofit for persons with intellectual disabilities were not entitled to real estate tax exemptions as charities. ARC Human Services, Inc. v. Clearfield County Assessment Office, 2015 Pa. Commw. LEXIS 398. The court agreed with the trial court that the taxpayer had not established that it donated or rendered gratuitously a substantial portion of its services. The evidence was that the taxpayer received charitable contributions that varied around one percent of its annual expenditures, but the contributions, at least in substantial part, were a return from its parent of fees charged for management services. The court held that the testimony was unclear to the extent to which the fees charged to residents were not covered by government payments, including Social Security payments. Therefore, the taxpayer had not proved entitlement to the exemptions.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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