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Avery County Wins Tax Case Against Grandfather Mtn., Foundation ‘Disappointed’ But Paying Back Taxes Today

By Jesse Wood

Jan. 5, 2015. Avery County has won its lengthy tax battle with the Grandfather Mountain Stewardship Foundation.

In December, the N.C. Supreme Court denied a petition from Grandfather Mountain seeking discretionary review over the N.C. Court of Appeal’s ruling in August that the N.C. Property Tax Commissioner “erred” in granting the foundation’s tax-exempt status in 2013.

“I am very pleased,”Avery County Tax Administrator Phillip Barrier said. “This puts a lot of my faith back into our judicial system and state because – nothing personal – any business in the county should pay taxes and that’s my feeling. If you are going after tourism dollars like everybody else, you should pay your share of the tax burden.”

Reached for comment on Monday, Grandfather Mountain Stewardship Foundation released a statement:

“While the Grandfather Mountain leadership is disappointed with the outcome of the case, we will certainly comply with the decision and, as of this afternoon, is delivering to Avery County the property taxes due for 2013 and 2014.

Regardless of the ruling, Grandfather Mountain Stewardship Foundation remains a nonprofit organization and is steadfastly committed to educating and inspiring our guests to conserve the natural world.

Grandfather Mountain has played a pivotal role in attracting visitors to Avery County and improving the regional economy since 1952, and we look forward to continuing to work alongside Avery County government for the benefit of our community.”

Barrier said that he’d been receiving quite a bit of calls from other local government officials around the state wondering about the progress in this lawsuit. Barrier noted that he’s received calls from Buncombe County and Blowing Rock officials, among others, who were “nervous” about the ramifications the alternative ruling would have set with the Biltmore House and Tweetsie Railroad.

“If [Grandfather Mountain is] exempt, this would have meant that everyone else would be lining up to file for an exemption as education,” Barrier said.

The origins of this lawsuit dates back several years. In 2008, the N.C. Division of Parks & Recreation reached an agreement to acquire 2,456 acres of Grandfather Mountain backcountry to become Grandfather Mountain State Park. The acquisition was arranged with assistance from The Conservation Fund and The Nature Conservancy, which holds conservation easements on some 4,000 acres of the mountain.

Months later, the Grandfather Mountain Stewardship Foundation incorporated as a nonprofit “to operate exclusively for charitable, religious, education and scientific purposes.”

In 2011, Grandfather Mountain Stewardship Foundation filed for an exemption with the Avery County Tax Office. That request was denied by Barrier and upheld by the Avery County Board of Equalization and Review, which handles appeals from property owners.

Grandfather Mountain Stewardship Foundation paid local property taxes in 2011 and 2012, while the N.C. Property Tax Commission took two years to hear the matter. The commission eventually sided with Grandfather Mountain Stewardship Foundation in 2013.

So in 2013 and 2014 Grandfather Mountain Stewardship Foundation didn’t pay local property taxes. Barrier noted that $58,000 is the average the foundation annually pays in taxes.

Avery County then filed with the N.C. Court of Appeals, which overturned the N.C. Property Tax Commission’s ruling in August. As of August, the county had spent $164,531 on outside counsel fees. Interim County Manager and Finance Director Tim Greene wasn’t available on Monday afternoon for an update on those fees.

Although the N.C. Court of Appeals ruling in August noted Grandfather Mountain’s educational and scientific programs about birds, reptiles, animals and native flora and fauna; noted that revenue from the operations on the property is used to further educational and scientific uses on the property; and noted that Grandfather Mountain allows other nonprofits such as the Avery County Habitat for Humanity and Humane Society and local boy scouts and girl scouts to use the facilities, the N.C. Court of Appeals still sided with Avery County stating that the foundation is not “wholly and exclusively used for scientific and educational purposes.”

Earlier this year, Grandfather Mountain Stewardship Foundation said that it believed that phrase may have been “interpreted too narrowly” by the N.C. Court of Appeals.