(CN) – A nursing home that caters to the poor may sound charitable, but if it is organized as a limited liability company it still has to pay taxes, the Massachusetts Supreme Court said.
The justices affirmed the decision of the state’s Appellate Tax Board in CFM Buckley/North v. Board of Assessors of Greenfield,
The plaintiff’s in the cases (CFM Buckley/North, LLC; Longmeadow of Taunton, LLC; and John Adams Nursing Home, LLC) provide nursing home care exclusively to indigent elderly and infirm patients on a nonprofit basis.
They each are organized as a limited liability company under the laws of Delaware, and each are operated by ElderTrust of Florida. ElderTrust is organized for charitable purposes and it qualifies for Federal tax exemption.
However, the decision states, “an entity organized as a LLC does not come within the definition of a ‘charitable organization,’ and that a ‘charitable organization’ must occupy real property for the property to be considered for a tax exemption.
ElderTrust itself neither owns nor occupies the real property, as the statute requires, the court ruled.