Tex. Student Hous. Auth. v. Brazos Cnty. Appraisal Dist.
No. 07-11-00421-CV
Case Summary Written by Kathryn Almond, Staff Member.
JUSTICE WILLETT delivered the opinion of the Court.
The Texas Student Housing Authority (TSHA) was established with authority under the Higher Education Authority Act. TSHA acquired title to the Cambridge, a student-residential facility in College Station. Because the residential facility was near Texas A&M University (TAMU), the TSHA contracted with TAMU to provide housing to some summer programs hosted there. This was in addition to the students renting units for summer school at TAMU and Blinn College. The Brazos County Appraisal District (BCAD) voided TSHA’s tax-exempt status under the education code for 2005–2008 and required payment of millions in back taxes because the property was not exclusively used for students attending the universities during those years. The trial court ruled that BCAD was correct in denying the tax-exempt status. The court of appeals reversed the decision for only one year.
Issue: Whether using student residential facilities for summer program housing violated the tax-exempt status.
The Supreme Court of Texas ruled that the TSHA proved its tax-exempt status under the Education Code. The Court reviewed the status that it must “clearly show” its statutory exemption. The Court reasoned that both the housing and educational facility provisions of the Education Code are defined in terms of use. Further, the Court reasoned that the title and text of the Education Code declares that these authorities are exempt from taxation because the language focuses on who the property owner is instead of how the property is being used. Moreover, there was nothing in the statute to state that the property be used “nonexclusively” and there was no conditional language in the statute. The Court clarified that this opinion did not hold that the TSHA could not use the property for any purpose and continue to receive exemption. Therefore, the Court held that the Legislature’s clear intent was to grant an exemption to TSHA and there is a presumption that the property was only used for authorized purposes. The Court affirmed the court of appeals decision with regard to 2005, and reversed the decision with regard to the other years.