The Connecticut Supreme Court sided Thursday with a nonprofit group home for individuals who suffer from severe mental illness, ruling that it does not have to pay local property taxes.
The court agreed that Rainbow Housing qualifies for an exemption for a residential property at 461 Main Street in Cromwell known as Valor Home.
The town of Cromwell argued that the property was not tax-exempt “because it provides housing that is subsidized in part by the department and because the housing is not limited to a finite length of time and, therefore, is not temporary.”
A lower court and the Supreme Court disagreed.
The court rejected the argument by the town that it was difficult to determine the length of stay for clients of these group homes.
“We reject this claim because the charitable purpose of an organization, as reflected in its foundational documents, will provide municipal assessors with a reliable and practical metric by which to determine whether a period of residency is temporary,” Justice Steven Ecker wrote in a footnote of the opinion.
Tax assessors were hoping for more clarity on the issue.
Cromwell Tax Assessor Shawna Baron has said some of the exemptions — like the one for group homes — are a little “gray” and it would be nice if it were clearer, but “assessors don’t generate legislation.”
In 2018 she had said the law is clear that the property needs to be used exclusively for the stated nonprofit purpose in order to continue to receive the tax exemption. Thursday, she said she had not yet read the Supreme Court ruling and said she could not comment on it.
It’s unclear if the ruling will be used to help determine the outcome of other cases.
The state’s nonprofit community believes it will.
With at least 12 other appeals pending in Superior Court, the ruling was welcomed by nonprofit organizations across the state, the association representing the state’s nonprofit groups said in a statement.
“The Connecticut Supreme Court has issued a decision that upholds an important principle — charitable nonprofits are tax exempt and assessors should stop taxing them,” Gian Carl Casa, president & CEO of CT Community Nonprofit Alliance, said.
Casa added, “Connecticut has a long tradition of not taxing community nonprofits because they provide services on behalf of the municipal and state governments. The Court’s ruling clarifies this long-standing practice. Nonprofits provide services to some of the most vulnerable people in our communities, and their very existence makes this state a great place to live for all of our residents. We appreciate the ruling on behalf of hundreds of community nonprofits located in every city and town across the state.”
