Minnesota Supreme Court says daycare does not qualify as nonprofit

The Minnesota Supreme Court ruled Thursday in a case that could have implications for nonprofit organizations around the state.

The court found that a Red Wing daycare center does not qualify for a property tax exemption because the organization failed to meet one of six criteria long used to determine tax exemption status.

"County assessors may be licking their chops a little bit"

The ruling would affect non-profit 501 C-3 organizations that own property.

It is still unclear how many groups could be affected by the ruling and how it could be applied. But Jon Pratt, Executive Director of the Minnesota Council of Nonprofits, says the decision could have a huge impact on the state's thousands of non-profits, including health and child care, arts and human service organizations.

"County assessors may be licking their chops a little bit, saying now they can get some of these organizations to be paying taxes that had just been community benefit projects and free from paying taxes," says Pratt.

Non-profit organizations make up an estimated 10 percent of the Minnesota economy.