Fairbanks Christian youth camp engaged in legal fight with Borough over tax exempt status
FAIRBANKS, Alaska (KTVF) - Camp Li-Wa, operated by Victory Christian Ministries, has been engaged in a multi-year legal fight with the Fairbanks North Star Borough over their tax exempt status for borough property taxes. Since 2018, the Borough has been requiring them to pay property taxes. According to David Goff, the operations director for the camp, the issue starting in 2016 when they rented out some of their cabins on Air BnB during the off-season.
“The Borough looked at it to see if it was a taxable event for us or not, they determined originally that it was not,” said Goff. In 2017 they decided not to use Air BnB and instead listed the cabins on VRBO. Goff said they again heard that the borough was looking to see if it was a taxable event. He said they sent the Borough the letter from the previous year and never heard back. Then in 2018 things changed.
“In 2018 we started getting notifications from the assessor that we were going to be assessed for property taxes at that point and so we have been paying property taxes since then,” Goff said. They have since paid over $200,000 in property taxes to the borough.
Goff said they haven’t rented their cabins out in two and a half years and that even when they were being rented out it was an extension of their ministry.
“It was a way for us to reach out to talk to other people about the Gospel message as well. Each of the groups that came in, we did a discussion with them before they lodged here in the evening. They would talk to our camp director that was onsite and the Gospel message was clearly presented,” Goff said.
He also said that originally the borough was looking to charge them a bed tax, not implement property taxes.
In 2018, Goff said that the borough decided they were no longer just a religious non-profit, “He looked at us solely as being a church type setting, so if we aren’t having a service, if we aren’t everything in more of a church type way, then he feels it is not an exempt purpose, so he determined our status was null and void and began an assessment on us.”
According to the borough, because they rented out some of their buildings to other non-profits and businesses in town for retreats, they were no longer solely a religious non-profit and should be taxed. Goff said that they have been running the camp the same way since 1985 and it is the boroughs opinion that has changed, not their operations.
Goff said that the State of Alaska and the Federal government still considers them a non-profit even if the Borough doesn’t.
They have filed multiple lawsuits against the borough to try and get the taxes stopped, but the judge said that until the FNSB Board of Equalization makes a decision they can’t rule on the lawsuits. Goff said they are currently waiting for that decision before they are able to move forward.
He hopes that they will be placed back in a tax exempt status and be returned the money they have paid to the borough. He said if they have to continue paying over $60,000 a year in taxes they may not be able to run the camp and continue to serve the community.
Goff also said that this issue doesn’t just impact them, but religious non-profits all over Fairbanks.
“If a church all the sudden rents out their facility or allows a non-religious, in his opinion, group to come in and they receive any funds from that, then they are going to become a taxable entity.”
We reached out to the borough for a statement and they replied in an email, “The Borough has a constitutional obligation to equally treat similarly situated taxpayers. While portions of Camp Li-Wa are exempt because they meet the legal standards for religious and charitable use exemptions, the portions which are competing with other commercial businesses and not used exclusively for exempt purposes, are being taxed in accordance with law.
The Borough is acting in accordance with a settlement agreement reached between the parties as to the proper forum for them to resolve disputes.”
We will continue to follow this story as it progresses.
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