The Indiana Board
of Tax Review has upheld a local finding, by the Porter County Property Tax
Assessment Board of Appeals (PTABOA), that the union hall and the Duneland
Falls meeting and banquet facility owned by United Steelworkers Local 6787
are not tax-exempt.
In 2008 and then
again in 2010, Local 6787 sought a 100-percent exemption for the
12,000-square foot union hall and a partial exemption for the 22,000-square
foot Duneland Falls, on the ground that, inasmuch as the union fulfills its
“intended purposes,” as stipulated in its bylaws, “it would likely qualify
as having a charitable purpose.”
both petitions and determined the two buildings to be 100-percent taxable.
Local 6787 subsequently appealed PTABOA’s rulings before the Board of Tax
On Friday, Jan. 16,
BTR issued a finding upholding each ruling.
Assessor Jon Snyder released this statement to the Chesterton Tribune
after deadline on Thursday: “A great deal of time and resources were
exhausted in order to insure that Porter County was following a law in
denying a property-tax exemption for the United Steelworkers. The (Indiana
Board of Tax Review) confirmed that the county is indeed lawful in denying
the exempt application. I am hopeful that we can both move on and continue
good service to the citizens of Porter County.”
The crux of Local
6787’s argument for a tax exemption is its contention that the union does
fulfill a charitable purpose “as broadly construed (i.e., spiritually,
physically, intellectually, socially, and economically advancing mankind in
general, or those in need of advancement and benefits in particular”).
In evidence of that
charitable purpose, Local 6787 cited among other things the following:
* In 2008,
confronted by ArcelorMittal’s notification of impending layoffs--projected
to impact 2,444 of the 3,200 union employees at the Burns Harbor
facility--Local 6787 negotiated a layoff minimization plan (LMP) which
“allowed all of the members of the union to retain their employment.” That
LMP relieved government of the need to provide laid-off workers with
unemployment benefits and thus provided both the Steelworkers and “the
communities of Northwest Indiana with enhanced job and economic security,”
Local 6787 argued.
* Local 6787
provides the families of Steelworkers on active duty with the Armed Services
$400 per month in aid from its food bank.
* Local 6787 is the
“largest funding source for the United Way of Porter County,” donating a
total of $782,000 to United Way between 2010 and 2012.
* Local 6787 “takes
an active role in charitable activities by raising money for breast cancer
awareness, holding smoking cessation classes, participating in Toys for Tots
and Steelworkers for Kids, contributing to food bank, and financially
supporting healthier lifestyles.”
For its part, the
Porter County Assessor’s Office maintained that, while Local 6787’s
activities “may have some charitable and educational aspects,” the union’s
main function is to promote members’ interests as they relate to their
employment with the company.”
Office also noted that union activities are not tax-exempt under state law
and argued that, “if the legislature had intended union activities to be
exempt, it would have provided a specific exemption for that use.”
In its Jan. 16
ruling, BTR concluded that “the evidence” indicates that Local 6787 “expends
the majority of its time and resources in the negotiation and implementation
of the (basic labor agreement) between the union and the company.”
Or, put another
way, “the union’s actions are in furtherance of the members’ private
interests rather than out of altruistic or philanthropic motives.”
Thus, for example,
BTR found that Local 6787’s efforts to prevent closures or layoffs do
benefit “the entire community” but that those benefits are “incidental” to
those “conferred on the members.”
As it happens,
Local 6787 also sought an exemption for the Duneland Falls facility in 2006.
PTABOA rejected that one as well and found the building to be 100-percent
taxable. Local 6787 appealed that ruling too. BTR upheld PTABOA in 2009.