Acupuncture school loses tax fight

July 8, 2019

Jim Saunders

TALLAHASSEE --- After years of wrangling about the issue, a divided appeals court Monday rejected a property-tax exemption for a Gainesville acupuncture school that argued it qualified because it is an educational institution.

The 1st District Court of Appeal sided with Alachua County Property Appraiser Ed Crapo, who in 2014 rejected an exemption for Academy for Five Element Acupuncture, Inc., because he said it did not meet the legal definition of an educational institution for tax-exemption purposes.

A circuit judge ruled that the non-profit school qualified for an exemption, and a three-judge panel of the 1st District Court of Appeal upheld that ruling, pointing to the fact that the school received a property-tax exemption in the past. But the full appeals court then took up the issue and backed Crapo on Monday.

Part of the majority opinion said the tax code links the definition of educational institutions to membership or credentialing by the Florida Department of Education, the Southern Association of Colleges and Schools or the Florida Council of Independent Schools. The majority said the academy met licensing requirements of the Florida Commission for Independent Schools. The commission is administratively housed at the Department of Education, but the court said that does not mean the academy meets the legal test for the tax exemption.

“In this case, no one disputes that the Academy is a state-licensed private post-secondary school that grants certificates and degrees in acupuncture, Chinese herbal studies, and health science,” said the majority opinion shared by Chief Judge Stephanie Ray and judges James Wolf, Joseph Lewis, Clay Roberts, Lori Rowe, Ross Bilbrey, Susan Kelsey, Thomas Winokur and M. Kemmerly Thomas. “But Property Appraiser Crapo argues that the Academy is not entitled to the exemption because it is not credentialed by, and does not offer classes or courses as required for credentialing by, one of the three entities identified in (a section of law): the State Department of Education of Florida, the Southern Association of Colleges and Schools, or the Florida Council of Independent Schools. Rather, the record evidence here only shows that the Academy’s classes and courses satisfy licensing requirements of the Florida Commission for Independent Schools, which is not one of the entities the statute identifies.”

One of the key issues in the case was whether the academy was entitled to continue receiving a tax exemption after receiving such a break in the past. The school had received a tax exemption in Broward County before moving to Gainesville.

In 2008, Crapo tried to deny a tax exemption for the academy but lost when the issue went to the Alachua County Value Adjustment Board, a panel that reviews challenges to property appraisers’ decisions. After the school had an exemption from 2008 to 2013, Crapo denied the exemption in 2014 and went to court over the issue after the Value Adjustment Board ruled against him.

In a dissenting opinion Monday, appeals-court Judge Scott Makar wrote that Crapo did not challenge the 2008 decision by the Value Adjustment Board in court and should be “precluded from undertaking duplicative and vexatious actions against the Academy absent changed circumstances, which he admits don’t exist.”

“The Legislature has accorded broad powers to property appraisers, but established an elaborate statewide system of 67 quasi-judicial bodies whose sole purpose is to adjudicate property tax disputes in a fair, unbiased, and uniform manner with virtually every attribute of due process as well as the right to appeal adverse rulings,” wrote Makar, who was joined in his dissent by judges T. Kent Wetherell and Harvey Jay. “It is less than reassuring, therefore, to accept the proposition that property appraisers should have unchecked power to deny a previously granted tax exemption each and every year even though nothing’s changed that would alter a value adjustment board’s (or circuit court’s) ruling.”

But the majority opinion rejected the notion that Crapo’s decision not to fight the 2008 Value Adjustment Board decision amounted to “administrative finality” about whether the school should receive an exemption.

“Even if an exemption is granted, and re-application waived in favor of an automatic renewal, it is only subject to the appraiser’s statutory right to require a new or updated application,” the majority opinion said. “No one goes into this with an absolute ‘right’ to avoid interacting with the property appraiser for more than a year.”

Judge Timothy Osterhaus wrote an opinion that partially concurred with the majority and was joined by Judge Brad Thomas.