County denies tax exemption for daycare

Kimball’s commissioners, acting as the Board of Equalization, voted to deny the Kimball Child Care Center tax “exempt” status during their Feb. 16 board meeting.

The Kimball County Commissioners, along with Kimball County Treasurer, Sherry Winstrom, heard statements and asked questions of Lynne Klemke who presented for the Volunteers of America (VOA) of Western Nebraska, in regards to a request to acquire a tax exempt status.

The county treasurer received a letter previously from the VOA, who operates the child care facility, which she read aloud to the commissioners prior to their consideration hearing.

The letter read in part, “I am sending a form 451 application for the tax exemption for our use of two rooms within the Kimball Health Services Administrative building, 301 South Howard. I apologize for this being later than the Dec. 31 deadline, however our organization was only just told that our portion of this facility, is being taxed...Please advise after your review if there is anything further that we can do to have full consideration of our application for possible exemption.”

The Kimball Child Care Center is contracted for two rooms, one houses toddlers and infants are cared for in another, although they use additional rooms in the building for the purpose of the daycare.

“The general lay-of-the-land in order to be eligible for the exemption, there is a five part test,” explained Matt Turman, Attorney for the commissioners, “The five different factors are – that the property has to be owned by a religious, educational, charitable, or cemetery organization; the property must be used for religious, educational, charitable or cemetery purposes; the property may not be used for the gain or profit of the owner; the property may not be used for the sell of alcoholic liquor for more than twenty hours a week and the property may not be owned or used by an organization that discriminates.”

“I would like to give you (VOA) an opportunity to give us some information about your organization, and then I have some additional questions,” Turman added.

Klemke stated that the child care center was operating basically as a non-profit organization and that VOA is a ministry service.

“One of the things that our organization does, in the Kimball Child Care Center is a program of our organizations,” she said. “We are actually the licensed holders. Our organization stands on five pillars, and those pillars are a ministry service. I, myself, am a commissioned minister. We are federally organized as a church. We have minimum standards that we must meet, to maintain our organization as a church.”

“You mentioned that you are organized as a ministry or a religious service,” Turman asked, “is this a strictly religious based child care?”

Although individuals have access to the ministers that are within the program, Klemke answered that the care is not strictly based on religion.

“It’s obvious that you do a great service. I’m going through these stats – looking at the tests – it’s not a religious organization, necessarily. It’s not cemetery and that’s obvious. Whether or not it’s ‘educational’ – probably not,” Turman said. “In visiting with some of the attorneys from the Department of Revenue, basically what they advised was – what determines whether or not you can apply for the exemption is how you treat people who can’t pay. That’s it. Because at the end of the day, what you are trying to do is to distinguish yourself from a ‘normal’ daycare and a charitable child care or daycare.”

“It comes down to whether or not you are charitable. I think where I see that falling is probably ‘not’. I don’t think that your organization qualifies as charitable if they can’t pay. You mentioned yourself, that you are operating as a business,” Turman said. “In my mind, I would recommend denying the exemption. Knowing that there is something implemented to help people pay under every circumstance, in my mind then it would qualify.”

Once Chairman Larry Engstrom moved to close the hearing, Winstrom advised the board that the application was not received on time and that the organization does not appear to be religious, charitable, educational or cemetery and offered her denial of the request.