Here is an interesting article that touches on our discussion a while back about how tax exemptions are privileges which depend on rules about the activities that nonprofits (state concept) and tax exempt entities (IRS concept) engage in. Here a state permits tax exemption for property as long as it is supporting the university, but the debate was over whether the support could come through the revenues from its use commercially or only through its use for actual university purposes. Note the concern over “commercial advantage”; the justices are saying that if the University don’t have to pay local property tax on the property, that gives it a commercial advantage over other landlords (the building houses apartments and a credit union) because it can potentially offer lower rents than nonexempt landlords. (This rests on a understanding of a concept from Public Budgeting and Finance: tax shifting, where ultimately landlords will pass on the cost of the property tax bill to renters as it is part of the cost of operations). Note also who is bringing the case: the local school board, since that is the beneficiary of the property taxes that have not been paid. Now as long as the building is still cost effective to run and revenues exceed expenses after property taxes are included, then the University may still opt to do so; but the proceeds available to put into the scholarship fund will obviously be lowered. Note also that this whole situation results from a gift from a donor of the building in order that it’s revenues could be used for the Veterinary program.