Property Tax Alert: Minnesota

February 2007

A nonprofit corporation that operated a state-licensed daycare facility was entitled to a Minnesota property tax exemption as an institution of purely public charity because the corporation satisfied the majority of test factors enumerated in North Star Research v. County of Hennepin (236 NW2d 754 (1975)). The corporation fulfilled its stated purpose, public and private contributions amounted to less than 25% of the corporation's operating resources, and the rates charged by the corporation were below market rates. In addition, no profits accrued to the corporation, and its undertaking lessened the burdens of government by providing daycare services. Finally, the corporation's articles of incorporation stated that, upon dissolution, all the corporation's assets were to be distributed for use in a similar child care exempt organization or to a charitable organization exempt under IRC Sec. 501(c)(3).

Please contact Rash & Associates for more information.