gr cityThe city of Grand Rapids, Mich. continues to deny the Acton Institute application for property tax-exemption, even as Acton presents evidence to support such status.

The Acton Institute, recognized by the Internal Revenue Service as a 501(c)3 non-profit organization and ranked #11 in the world as a social policy think tank by the University of Pennsylvania, received notice from City Assessor Scott Engerson that it did not meet the criteria for tax-exempt status for property tax purposes.

Most people think that if they’re a tax-exempt 501(c)3 they’re exempt from property tax, and that’s not the case in Michigan,” he said. “In regard to Acton, it’s the charitable piece that the city was not able to definitively conclude.”

Acton is one of 435 organizations appealing the city’s ruling regarding tax-exemption this month alone. Today, Acton made its appeal.

Acton Executive Director Kris Mauren asserted not only his organization tax-exempt but charitable.

“It’s reasonable to the city to define things narrowly,” Mauren said during testimony. “In this case, they’ve defined charity far too narrowly and declined our claim.”

Mauren cited the Michigan General Property Tax Act under Section 211.o, which defined the word “charity” broadly for property tax purposes as “bringing the people’s minds or hearts under the influence of education or religion; relieving people’s bodies from disease, suffering or constraint;” among other definitions.

He, too, argued under Section 211.7n as Acton houses a 200 seat auditorium, an art gallery and a library. Nonprofit organizations owning such venues are to be exempt from taxation.

Last year, Acton chose to re-locate to the city’s Heartside District, renovating a historical building that dates to 1929. Acton University, a 4-day educational conference held annually in Grand Rapids, brings in over 800 visitors from around the globe to downtown Grand Rapids.

Catherine Mish, attorney for the city of Grand Rapids said it was her opinion that “Acton does not qualify because it’s not part of an educational system provided by the state and supported by public funding.” Acton’s Kris Mauren responded:

Fortunately, we’re governed by the laws of the state and not the opinions of the city attorney, but it’s a pity that we have to go though all this effort, as well as the city, in contesting this as we go forward.”

This move by the city of Grand Rapids may be part of a larger trend. A recent Washington Post story (“Struggling for revenue, local governments look to nonprofits“) addresses this very issue.

Acton awaits the city’s decision from the Board of Review.