Two Cedar County nursing homes challenge loss of tax exemption

Some Cedar County property may be taxed for the first time in years for lack of a document.

”For some reason we don't have a lot of those applications on file, and what I'm doing is trying to get those up to date,” County Assessor Dan Lett said.

State law requires non-profit organizations to file an application with the county in which their property is located to be exempt from property taxes. Lett said he's unable to find the applications for 10 Cedar County non-profits, and he plans to contact all groups making such claims to ensure their applications are up to date.

Two of the non-profits, those operating the Clarence Nursing Home and Cedar Manor Nursing Home in Tipton, are challenging Lett's revocation of their exemption in court. The county's conference board upheld Lett's finding.

Meeting the law is a matter of filling out a simple form, Lett said, but the nursing homes are challenging his revocation for taxes payable this year and in 2011. Judy Kaeser, administrator at Cedar Manor, said it will have to pay about $53,000 if it loses its court challenge.

“We will be waiting for the form and we will be following through with that appeal,” said Kaeser.

Kaeser said Cedar Manor is owned by the non-profit Cedar Foundation, incorporated in 1960.

”Everything about it is charitable,” she said. “The board is not paid a salary, there's no stockholders.”

Jeff Tjaden, administrator at the Clarence Nursing Home, estimated the facility's tax liability at $43,000. He said the home is a non-profit, incorporated in 1968.

Lett said he doesn't doubt the non-profit status of the organizations, but state law requires him to have their applications before granting the tax exemption. He said the applications were an annual requirement until 1983, when it became a one-time process.

“I have nothing prior to 1983,” Lett said. “I don't have much documentation. I'm not targetting any one party. It's just not fair if they're not following the law.”

“I looked at his records, and he only had one that was '83,” said Dale Hyman, administrator of property taxes for the Iowa Department of Revenue. “All those earlier exemption applications were apparently not kept, or tossed out.”

A court date hasn't been set for the nursing homes' challenges, County Attorney Sterling Benz said.

State Rep. Jeff Kaufmann thinks Lett acted “arbitrarily” in denying the property tax exemption, and said he'd try to change the law if the nursing homes lose their court challenge.

“I'm compelled as a legislator to tighten up that law so I don't give assessor like Dan Lett the flexibility” to make the decision, said Kaufmann, R-Wilton. “I don't believe they should have the right to just arbitrarily look at everything.”