Northfield Tax Waiver
CUMBERLAND – After some debate during last week's board of supervisors meeting, the board directed County Administrator Vivian Giles to schedule a hearing for an application for tax exemption for Northfield Foundation For Eating Disorders, Inc.
The application originally came before the board during September's meeting. After some discussion and the withdrawal of a motion that would have denied the request outright, the board delayed its decision in order to gather more information regarding how Northfield would benefit the county.
Northfield is a residential treatment facility for women struggling with eating disorders, self-harm, depression and in some cases, unplanned pregnancy. The foundation is a 501(c)3 organization and therefore exempt from federal taxes.
However, it is not exempt from county property tax because it is not an organization type that is classified as tax-exempt in state tax code. Some organizations, such as churches and libraries, are automatically tax exempt due to their classification.
The decision to designate other nonprofit organizations as tax exempt was determined by the General Assembly until 2003. Specific instances of fine arts centers, Meals on Wheels, medical clinics, senior centers and museums were designated as exempt from property and real estate tax during that time. Since 2003, localities determine if new organizations, not already classified as tax exempt, should be designated as such.
According to Virginia Tax Code, a specially designated exemption is for “a nonprofit organization that uses such property for religious, charitable, patriotic, historical, benevolent, cultural, or public park and playground purposes.”
According to Commissioner of Revenue Anita French, although many applications have been picked up in her office, Cartersville Medical Center has been the only other organization to file for tax-exempt status since the decision was given to localities in 2003. The board of supervisors granted the medical center's request for tax-exemption.
The request from Northfield for tax-exemption was originally submitted to the board during the September meeting.
During that meeting, Chairman of the Board David Meinhard, District Four, moved to reject the application because “we have other nonprofit agencies in Cumberland County who are not exempt from those taxes and I don't see any reason to make special exemptions for them.”
The Executive Director of the Northfield Foundation Gwen Seiler was allowed to address the board. She stated that “I want to render unto Caesar what is Caesar's,” but that because the foundation owns 49.463 acres, the taxes are hefty.
According to Seiler, the tax “sets us back. I'm just going to be honest. We could have been open possibly about a year ago, but it sets us back hugely every time.
“I realize the county needs the money…We want to be the kind of business that is not only making you all proud, but that is also bringing people into this community and growing the economy in other ways.”
Meinhard withdrew his motion that the request for tax-exemption be denied, but wanted to ask, “as we do this and decide to grant Northfield a tax-exempt status, what are we doing to our county's revenue stream?”
Currently, the county receives $9,951.54 in taxes from the foundation.
The board also requested additional information regarding other “offsets” the foundation may offer to the county, such as the number of local employees that will be hired and amount of salaries paid.
Supervisor Ingle, District Three, stated that “if people from this area will reap the benefits of employment. I think all that would weigh heavily again on a decision… I am not knocking the organization at all. They are a great organization. It is just that they are asking for a sizable exemption.”
The board was informed during the September meeting that it could grant a full or partial exemption, but that in order for any type of exemption to be granted, a public hearing must be held first.
The board has not yet had an opportunity to look over any of the offset statistics regarding employment and salaries that they requested of the foundation. However, during this months meeting, Giles suggested that scheduling the public hearing provides an opportunity to hear from the public and provide “another means of gathering information… that would supplement any information provided by the applicant.”
A public hearing will be held during next month's board of supervisors meeting on November 13.