A $1.6 million tax bill in Sarpy County could hang on the definition of “clerical error.”
The Bellevue Medical Center last week sued Sarpy County Assessor Dan Pittman, Treasurer Rich James and the County Board over a tax dispute from 2012.
Pittman notified the hospital in August that it owes taxes on seven parcels at its Highway 370 and 25th Street location. The bill comes to more than $1.6million, according to county records.
The hospital's attorneys say it owes nothing, arguing that Pittman missed legal deadlines that invalidated the assessment.
With a few exceptions, state law says an assessor needs to notify property owners between June 1 and July 25 if a property valuation changes.
But Pittman, after finding an error, didn't notify Bellevue Medical Center of changes until Aug. 21.
Since the hospital opened in 2010, the property had been listed as tax-exempt.
The medical center didn't return its annual exemption paperwork for the 2012 tax year — which made it liable for taxes. But Pittman's office never changed the hospital's tax code in the county's system.
Pittman argues that the mistake was a clerical error, one of the exceptions allowed in state law. The hospital contends that it is not and that the assessment is void.
Half the taxes owed on one parcel have been collected; the county sent out a delinquency notice for the remaining $1.51million, James said.
Howard Hahn, an attorney for the hospital, declined to answer questions but released a brief statement from hospital CEO Paulette Davidson that said, in part: “Bellevue Medical Center and Clarkson Regional Health Services look forward to the Court's resolution of this matter.”
Bellevue Medical Center has several entities involved in its operation.
In 2006, Bellevue Medical Center incorporated as a limited liability company, with doctors holding a 40 percent ownership stake and the remainder held by the Nebraska Medical Center, according to state records.
Clarkson Regional Health Services, the entity that filed the lawsuit, also filed the tax exemption paperwork for the hospital, originally in 2008.
Clarkson forfeited its tax-exempt status on the property last year. Lawyers and hospital representatives would not answer questions about the hospital's ownership, activities or tax status.
Pittman said part of the trouble stemmed from confusion over the property's ownership and use.
Last fall, in writing to Sarpy County Deputy Attorney Mike Smith, Pittman said that while Clarkson owns the property, the medical center is operated by a for-profit organization for a purpose that doesn't merit a tax exemption.
Smith said it's uncommon for a property to change exemption status without a sale.
“That's one of the curveballs in this thing,” he said. “It's a very unusual situation, and frankly, the law isn't clear.”
Clarkson also is challenging Pittman's $80 million valuation of the Bellevue property. It says the true value is closer to $28million.
The Sarpy County Board in October rejected the hospital's assessment protests.
In addition to the lawsuit, Bellevue Medical Center has appealed to the Nebraska Tax Equalization and Review Commission, which “has raised questions as to whether it has jurisdiction to hear the appeal,” according to the lawsuit.
At a June hearing, attorneys for both sides will present evidence to establish whether the commission can even hear the case, said Steve Keetle, counsel for the commission.
Contact the writer: 402-444-1216, firstname.lastname@example.org