It is safe to say the Yacht Club’s tax exemption has reverberated around the county a time or two so now it’s time we put everything together and illustrate both how the process under which tax exemption was given is fatally flawed, lacking any semblance of transparency and what the elected officials can do to fix it.
There has been lots of information posted already and then Geoff Belcher’s article for the Sea Coast Echo proved as an invaluable resource because the players behind the events made on the record comments. First things is to emphasize the update to the first post because we did get a fact wrong and the correct facts need to be emphasized:
Slabbed has been contacted by the Department of Revenue in response to communications from Jimmie Ladner’s office. Jeff Foreman of MDOR indicated this this type of tax exemption does not require MDOR approval:
As I understand from ……. below, the Bay Waveland Yacht Club is claiming exemption as a “perpetual or fraternal and benevolent organization”. As you have already established in this thread, such an exemption is clearly authorized under Miss. Code Ann. Section 27-31-1(d). Under current Mississippi law, case law and guidance from the Mississippi Attorney General, the duty to determine eligibility for such an exemption lies solely with the county. The Department of Revenue plays no role in the approval of such exemptions and, as such, there is no requirement for any information regarding such exemptions to be filed with the Department.
The takeaway from Mr. Foreman’s very important clarification needs highlighting because it drives the inescapable logic that follows:
Under current Mississippi law, case law and guidance from the Mississippi Attorney General, the duty to determine eligibility for such an exemption lies solely with the county.
Mr. Foreman’s word are precise and he didn’t say the duty to determine eligibility for such an exemption lies solely with the tax assessor/collector, rather he was referencing the County Board of Supervisors and the Tax Collector. Lana Noonan of the Hancock County Alliance for Good Government asked the follow-up question to confirm with Mr. Foreman his very precise remarks. This is what he said:
“County” is not expressly defined under MCA §27-31-1. However, under MCA §27-35-113, the tax assessor and board of supervisors are vested with the absolute authority to investigate and determine the assessed valuations of individual parcels of property located in their particular county in a manner consistent with the laws of this state. As such, it has been my limited experience that claims for exemption are made with and determined by the county tax assessors. If approved, the matter would be subsequently approved by the board of supervisors upon their approval of the county’s tax rolls. If denied by the assessor’s office, the claimant may formally protest to the board of supervisors. A denial by the board could be appealed in circuit court.
Mr. Foreman is not an expert in Mississippi County Governance but what he is describing is a system where the exemptions are presented to the Supervisors with the County tax rolls. If a property is completely removed from the rolls it wouldn’t show up on the tax rolls for the County Sups to approve so there could not be an actual approval in that circumstance. On the other hand if the exemptions are clearly shown on tax rolls the Supervisors have no excuse to claim ignorance of the exemptions the tax collector is giving out. Here is the process for getting an exemption per Jimmie Ladner:
You also inquired as to whether my office has a form that is required to be filled out to receive such exemption. The answer is no. Exemptions are typically requested by the entity either verbally or in writing. My office then reviews the request to make the determination as to whether tax exempt qualifications are met. In this particular case, the BWYC Commodore called my office to discuss the tax exemption. We discussed the exemption and he later sent a letter on BWYC’s letterhead that included the required documents needed to confirm qualification requirements. At this point, the property obtained exemption status which remains on the books today. I stand by my position that the BWYC qualifies and appropriately receives the tax exemption.
This is what Ladner told the Echo:
Hancock County Tax Collector-Assessor Jimmie Ladner said Friday that he’s been blasted, as well, and unfairly so.
“The truth of the matter is that when I first took office in 2000, the then-leadership of the yacht club came to me and asked for an exemption. They didn’t quality at that time. They asked me what it would take to qualify for an exemption. Several sets of leadership have asked the same thing over the years.
“In 2015, new leadership came in and they made changes to the charger. They now qualify. The law doesn’t give me the option (to say no) at that time. It says these properties ‘shall be exempt from taxation.’
“The only definition I’m accepting is what the law says ant eh accepted practice of the secretary of state’s office. They filed their paperwork in 2015. … It is not an exemption that may be given or may not be given. It’s not an issue for the board of supervisors. There was no ‘back-door meeting’ and that’s offensive and it never happened.”
Slabbed has checked the Supervisor minutes and agendas from September 2015 to December 2016 and the Yacht Club’s tax exemption does not appear one time. It’s public money Jimmie Ladner is giving away, out of the back door, in meetings to which there is no public involvement. I wonder, if the public had been aware of the Yacht Club’s tax exemption real time instead of years after the fact, whether or not it would have been granted. Given the firestorm of criticism that ensued after Slabbed broke the tax exemption I suspect not. With the public excluded it was very easy for the tax collector to ship $19,000/year out the back door. If Mr. Ladner can’t understand why he is now catching hell my mind is open to the possibility he’s been office a term or two too long.
Not all counties do it the way Mr. Foreman suggested however because some county Board of Supervisors choose not to forfeit so much power to the tax collector. Here are board minutes from January of this year of the Hinds County Board of Supervisors where the Supervisors specifically approved a tax reduction and in lieu agreement (pdf page 5 under Board Attorney)
We also have the Chevron case from Jackson County, again involving an in lieu agreement where the facts indicate the Pascagoula School District dealt with both the Supervisors and Tax Collector on a school property tax assessment. There are many such examples that can be found with a very simple google search.
At the end of the day the most damning evidence isn’t the lack of transparency, rather it is the failure to follow a very clear law because being fraternal and benevolent is not the determinative factor, rather it is whether the subject property is being used by the non profit to “profit”. Again here is what the statute says:
All property, real or personal, owned and occupied by a fraternal and benevolent organization, when used by such organization, and from which no rentals or other profits accrue to the organization, but any part rented or from which revenue is received shall be taxed.
I’ve personally been to the Yacht Club several times that had non club events held there, here is what the club says:
Overlooking the Bay of St. Louis, the Bay-Waveland Yacht Club offers the best views on the coast for your private event. Our creative, caring, and professional staff can help you plan a special party or meeting that will provide memories to last a lifetime. Our facilities and grounds offer many spaces that can be used as a part of your event.
Although, we are a private club and the facilities are not available for hire to the general public, club members may host events for non-members. Please contact the office at (228) 467-4592 or email us at [email protected]
And then there is the last 990 filed which the IRS which shows the club made six figures on its food and beverage service.
Tomorrow morning’s Supervisor meeting promises to be good since indications are this issue will not be fading away anytime soon. Meantime folks, taxes are going up in Bay St Louis……for some people anyway.