By Jolene Farley
Tuff Village in Hills is caught in tax limbo while the Minnesota Department of Revenue determines if the facility is property tax-exempt or not.
The Tuff Village submitted an application for a property tax exemption in February 2001 on the basis that Tuff Village is a "purely public charity", according to guidelines established by the Minnesota Department of Revenue.
"They (Dept. of Revenue) haven't made a final determination yet," said Bonnie Hengeveld, Tuff Village Administrator. "We knew we would have to apply for tax exemption. WeÕre just getting them the information they ask for. The determination is then made with the state and county."
If the Tuff Village is found to be a taxable entity, it will be taxed at 1.8 percent of the valuation of the property, according to Hengeveld.
The facility was taken off the tax rolls last year because the Department of Revenue had not determined the status of the facility, according to Rock County Assessor Tom Houselog.
Assisted living facilities are a relatively new development in senior care options in the state and Minnesota tax laws haven't kept pace addressing the tax status of the increasing number of these facilities.
Conflicting rulings have been issued on different assisted living facilities in Minnesota, according to Rock County Assessor Tom Houselog.
Since Minnesota statutes do not specifically define what is or is not an institution of purely public charity, guidelines for assessors in this area comes from the 1975 Supreme Court Decision, North Star Research Institute vs. County of Hennepin.
Hengeveld laments the fact that the determinations are made from a ruling made in 1975. ÔThe whole senior world has changed since 1975," she said.
"You could have apple-to-apple set-ups; one could be determined tax exempt, the other could be taxable," said Hengeveld.
The Minnesota State Legislature has yet to clarify the guidelines used by assessors to determine the tax status of these facilities.
"It all comes down to interpretation," Hengeveld said. "I think that is where you see the lack of uniformity."
The Department of Revenue didn't respond to the Tuff Village application until March of 2002. This is unusual, according to Houselog. He attributes the delay to the 2001 state government strike and the fact some paperwork was misplaced in the Department of Revenue office.
"It took almost a year the first time (to hear back), they did apologize," Hengeveld said.
If the Tuff Village is determined taxable, rent will increase for residents, according to Hengeveld. "We'd have to make some increases," she said. "It's not as much as we thought we'd have to do, but we'd have to make some increases."
The Tuff Village contracts with Rock County Family Services for financial assistance for residents. "No one is turned away here," said Hengeveld. "We're all looking at caring for the people in Rock County."