March 24, 2008
SUMMARY OF PROPERTY TAX DECISION INVOLVING ASPETUCK LAND TRUST
By: Judith Lohman, Chief Analyst
You asked for a summary of a recent Superior Court decision involving the Aspetuck Land Trust (Aspetuck Land Trust, Inc. v. City of Bridgeport, No. CV 06 4016847S, Superior Court, Judicial District of Fairfield at Bridgeport, March 3, 2008).
The case involved an appeal by the trust against the city of Bridgeport for denying the trust a charitable exemption from property taxes for the 2005 assessment year on a tract of land known as Great Salt Marsh Island. The court ruled in favor of the city.
CHARITABLE PROPERTY TAX EXEMPTION
State law exempts from the property tax property owned by or held in trust for any corporation organized exclusively for scientific, educational, literary, historical, or charitable purposes. The exemption applies to real and personal property used exclusively for carrying out one or more of these purposes. None of the corporation's officers, members, or employees may receive any pecuniary profit from the organization's operations other than reasonable compensation for services or as a proper beneficiary of the organization's charitable purposes. Each eligible organization must file an exemption statement every four years with the local assessor or board of assessors of the town where the exempt property is located (CGS § 12-81 (7)).
The court determined that the Aspetuck Land Trust is recognized as a tax-exempt charitable organization by both the state and federal tax authorities. The trust's purposes are to (1) promote preservation of natural resources in the state and (2) engage in and promote scientific study of, and educate the public concerning, local natural resources.
The trust bought half of Great Salt March Island from the town of Fairfield on September 1, 2005. The island is located in Bridgeport where a creek empties into Long Island Sound. It is subject to tidal flooding and is almost entirely underwater at high tide. The surface is covered with spartina grass and the island is home to rare birds. Although the trust does not encourage people to visit the island, it has no objection to visits by boat if visitors do not disturb its natural conditions. The only organized activity the trust has held regarding the island is a 90-minute bird walk and lecture in October 2006 in which 30 to 40 people participated.
In determining whether the trust met the requirements for claiming a charitable use property tax exemption for 2005, the court cited the general legal rules that tax exemptions be construed strictly against the party claiming the exemption and that it is the claimant who bears the burden of proving it is entitled to an exemption. In this case, the court confirmed that the land in question is owned by a tax-exempt organization that does not derive any income from it. Consequently, the case turned on whether property “held” for open space and land conservation qualifies as one of the exempt purposes stated in the law.
Because no Connecticut case addresses this specific point, the court relied on decisions in other states (Michigan, New York, and Maine). These decisions support the trust's view that preserving land in its natural state has aspects of a charitable use, but they also support the city's view that mere non-use is not enough to claim a charitable exemption.
Based on the cases from other states, the court ruled that land preservation constitutes a charitable use only when it is “coupled with some minimal educational or charitable activity in or near the property location.” In this case, although the trust bought the island in September 2005, it did not issue any publicity about the island during the 2005 tax year, did not feature it in any pamphlets or on its website, and did not host any school groups on or near the property. The island bird walk did not occur until October 2006. As a result, the court upheld the city's denial of a charitable exemption for the property for the 2005 tax year.