Taxation - Nebraska Supreme Court Approves State Property Tax Exemption for Nonprofit Nursing Home Corporation Closely Associated with For-Profit Corporations

Abstract

INTRODUCTION|The Nebraska Constitution grants the legislature the power to exempt from taxation property owned and used exclusively for charitable purposes. Pursuant to the constitutional grant of power, the legislature in 1903 enacted a statute exempting certain classes of property from property taxation. This statute was recently the subject of controversy in the Nebraska Supreme Court case of Bethesda Foundation v. County of Saunders. In this case it was held that a nonprofit nursing home corporation did not forfeit its claim to property tax exemption by virtue of its close association with for-profit corporations, where such association was for the purpose of minimizing nursing home costs, and did not result in financial gain or profit to the nursing home or its officers. This note will analyze the history and significance of prior cases leading up to Bethesda, as well as the policy considerations involved in the decision. In order to appreciate the ramifications of Bethesda, one must first understand the salient facts underlying the concern of local government subdivisions regarding property tax exemptions...