Non-profit organization hopes to keep tax exemptionPosted: March 22, 2009
Legendary music group The Beatles sang about the tax woes in the 1966 song “Taxman.”
Those woes can be felt at Nuçi’s Space, a non-profit organization that helps musicians suffering from depression, which is having its own tax woes with the Athens-Clarke County government.
Nuçi’s Space is in a property tax battle with the Athens-Clarke County government, a battle the county government isn’t willing to concede even with two appeals ruling in favor of the non-profit.
“It’s very disappointing to me,” Nuçi’s Space founder Linda Phillips said. “I understand that the ACC is just doing its job, but I feel that we are providing a much-needed service – one that is not being adequately addressed by local or state governments.
Phillips founded Nuçi’s Space, located on Oconee Street just on the edge of downtown Athens, in 1996 after Nuçi Phillips, a musician, committed suicide after years dealing with depression. His mother, Linda, along with their family, founded the non-profit with the intent on helping musicians cope with depression.
In addition to helping with counseling, the organization rents out space for musicians to rehearse for a low cost. Phillips said Nuçi’s Space mission is to provide health care for those suffering depression.
Nuçi’s Space works with Athens counselors and helps to cover medical costs for uninsured patients who seek help with a co-pay of $10 and also helps cover prescription medicine that may be unaffordable.
In 2007, the state of Georgia passed a law allowing non-profit organizations with commercial enterprises to apply for a property tax exemption. Nuçi’s Space applied, but Athens-Clarke County initially denied it.
Phillips and her foundation appealed to the county board of property owners and won. ACC appealed their decision to the Clarke County Superior Court and Nuçi’s Space won again.
And ACC is appealing again, this time to the Georgia Court of Appeals in Atlanta.
“It’s an important issue, and I don’t think Nuçi’s Space should get a free pass on not paying their property tax,” ACC attorney Bill Berryman said.
Berryman said the main issue the ACC has with Nuçi’s Space is that it sells alcohol on its premises and rents space for musicians to rehearse.
“Those two things don’t deal with what their mission is,” Berryman said.
Phillips said both alcohol sales and renting rehearsal space are directly linked with their mission because the money raised goes toward helping clients with counseling and prescription costs, since most of the musicians seeking help are uninsured.
“I also think that the ACC does not understand what we do and thus has a hard time even recognizing us as a charity,” Phillips said. “The property tax we pay each year is money that could be used for therapy.”
In the Clarke County Superior Court’s decision, Judge Lawton Stephens wrote there was enough evidence to determine Nuçi’s Space’s income was going toward its “charitable cause.”
Phillips said she thought hard about selling alcohol at Nuçi’s Space, but figured it would provide more of a service than harm.
“When I first came up with the idea for Nuçi’s Space, I thought a long time about having alcohol on the premises at anytime,” she said. “A good friend of mine, who is a psychiatrist and was Nuçi’s doctor, felt strongly that: One, alcohol is not illegal. Two, for most people, alcohol is not a problem. Three, it can be sold in a very adult and responsible way. We make very little on the sale of alcohol. It is only sold on specific occasions and we do it in a very responsible, realistic way.”
Attorney Donald Stephenson of Covington, who has no connection to Nuçi’s Space or the Athens-Clarke County government, said ACC’s biggest issue in this matter deals with the organization’s alcohol sales. But he added ACC would have to prove the money was not going toward charity.
“I believe that it will be the crux of their argument, especially given the controversial nature of alcohol use,” Stephenson said. “However, if the income derived from these sales are then applied exclusively for charitable purposes, then the foundation should receive the tax exemption.”
Brent Hedrick, manager of the downtown Athens restaurant and bar The Globe, said he feels Nuçi’s Space should be allowed to keep its tax exemption. Hedrick, who is also a musician in a variety of Athens bands, said he’s known musicians who have used Nuçi Space’s services, and that they are important.
I think there’s definitely a place for it, I will say that,” Hedrick said. “I think that a lot of musicians – the way you constantly wake up late and you go to work in the clubs and such. And I think there’s a lot of alcohol abuse and I think she’s doing something wonderful to try and treat this. It’s invaluable. And of course the practice space is wonderful too for kids that live in apartments.”
With the case headed to the state Court of Appeals, Phillips worries what will happen. If the Court of Appeals sides with ACC, then non-profit tax exemption could be up for grabs.
“If the court in Atlanta [doesn’t] side with Judge Stephens, I think it will open a big can of worms,” Phillips said. “The question then is how churches, Habitat for Humanity, the Salvation Army, etc. continue to be exempt from property tax. I am sure the non-profits are pulling for us.”