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Appellate Court Bars Re-litigation of Tax Exemption

Mon October 1, 2018 Publications

While Donnelly + Gross is known for its labor and employment law practice, we also represent organizations challenging the denial of property tax exemptions. This is one of those cases.

Recently, the First District Court of Appeal upheld the doctrine of administrative finality (also known as decisional finality) and ruled that the property appraiser was barred from re-litigating an acupuncture school’s educational institution tax exemption absent changed circumstances. See Crapo v. Academy for Five Element Acupuncture, Inc., No. 1D17-1895 (Fa. 1st DCA August 30, 2018). The school’s tax exemption as a private post-secondary educational institution was decided in the school’s favor a decade ago in 2008 by the Alachua County Value Adjustment Board. The property appraiser took no steps to appeal the VAB’s decision and the school’s exempt status was settled. In 2014, the property appraiser decided to revisit the issue and denied the exemption though there had been no change in the facts or law. For the second time, the VAB upheld the exemption, as did the trial court when the property appraiser appealed.

But for the appellate court, the issue to be decided (raised by the school on cross-appeal) was whether the property appraiser could year after year or perhaps every few years, decide to re-challenge the exemption even though nothing has changed. The appellate court resoundingly said, no. Allowing the property appraiser such authority was contrary to the principles of administrative finality and served no cognizable purpose, the court said. The decision (3-0) has an impact beyond educational tax exemption and is a win for property owners who may justifiably rely on prior determination on tax exemption absent changed circumstances.

Notably, Judge Makar agreed with the disposition on decisional finality but authored a separate concurrence that he would also affirm the trial court’s ruling on the validity on the school’s tax exemption because the school is certified and regulated by the Florida Department of Education via its license with the Commission. Judge Makar noted as persuasive and supportable the Florida Department of Education’s position that the exemption extends to independent post-secondary educational institutions which meet minimum education standards set by its Commission for annual licenses.