Nursing homes run by LLCs are not tax exempt, state board says

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Nursing home facilities operated by sole-member limited liability companies are not eligible for a charitable property tax exemption because they are unincorporated organizations, according to a recent decision handed down by the Massachusetts Appellate Tax Board.

The Massachusetts real estate exemption statute specifies that the owner of the property must be a trust or incorporated, according to the tax board. The board rejected arguments that the substance of the LLCs' activities as charities would qualify them for real estate tax exemption.

While the ruling applies only to Massachusetts, analysts cautioned that the decisions could be cited in future cases elsewhere.