The lease requires the tenant to pay all property taxes and insurance, in addition to the rent, so it is the tenant that receives all the financial benefit of the tax exemption, he said.
Vaughn rents the property to Wings Special Needs Community, a nonprofit entity that seeks to enhance the lives of adults with developmental disabilities through social, vocational and residential programs.
The property Vaughn rents to Wings was valued by the assessor at $822,000 and generated property taxes of $11,032 a year in 2011 before being removed from the tax rolls.
The property Sullivan rents to Family Builders was valued by the assessor at $435,000 and generated property taxes of $3,211 a year in 2008 before it was taken off the tax rolls.
While those two properties are tax exempt, Sullivan and Vaughn both pay property taxes on their homes and other nonexempt properties.
Sullivan's office lists the market value of his home at $479,075 and he paid $5,694 in taxes on that home last year. He paid additional taxes on other Oklahoma County properties.
The assessor's office lists the market value of Vaughn's home at $377,309 and he paid $4,213 in taxes on that home last year. His family corporation also paid Oklahoma County a small amount of taxes on vacant commercial land it owns.
Sullivan said he told staff members to appraise his personal home at the high end of what properties in his neighborhood were being valued at, rather than the low end, to avoid questions.
Sullivan said many landlords benefit from the same tax exemption that he and Vaughn do, but said he has no way of counting how many once they have been removed from the tax rolls.
He cited strip shopping centers that lease some of their space to churches as examples of property owners that receive partial exemptions.
Constitution trumps law
Properties like the ones Sullivan and Vaughn lease to nonprofit entities have not always been considered tax exempt by county assessors.
State law says tax-exempt status is to be conferred on “property used exclusively and directly for charitable purposes within this state, provided the charity using said property does not pay any rent or remuneration to the owner thereof unless the owner is a charitable institution.”
However, the Oklahoma Supreme Court's 2002 opinion said that law is unconstitutional to the extent that it would restrict property owners from receiving tax exemptions on property used by tenants exclusively for religious and charitable purposes.A note about this story: