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Farm’s tax-exempt status riles some Lisbon town board members

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LISBON - The town’s assessor has granted the Clements Agricultural Research Institute at Iroquois Farm, 10951 Route 37, tax-exempt status five years after the institute’s owner filed a lawsuit challenging its status as a taxable property, raising the ire of some town council members who believe the land should be taxed.

The decision to change the institute’s designation was made by Town Assessor Stephen E. Teele after he was appointed by the town council in 2012. Online tax records listed Mr. Teele as a member of the institute’s board of directors from 2002 to 2011, although he said Friday he was unaware that he was listed as such.

CARI has been recognized by the federal Internal Revenue Service as a not-for-profit organization since 1999, institute President Mahlon T. Clements said, and is therefore not taxable.

“We’re primarily a demonstration and learning operation,” Mr. Clements said.

The institute operates a 250-acre organic farm and bed and breakfast and leases space to a restaurant on the premises. According to the CARI’s website, the purpose of the institute is to “research the suitability of the crop land located along the U.S.–Canada border and the 45th latitude for a variety of vegetable, herb, forage and grain crops using traditional sustainable agricultural and organic methods of production.”

Town Councilor Alan D. Dailey said the town has spent close to $7,000 fighting the institute’s assessment challenge since 2007.

The 2012 tax rolls show the institute’s two properties in the town carried a total assessments of $525,226. This year it was listed as tax-exempt.

“The board is not in agreement with this, but we can’t tell the assessor what to do,” Mr. Dailey said.

Mr. Teele said he had been unaware of his designation as CARI board member although he had volunteered time with the institute working with organic farming techniques. In addition, Mr. Teele said, the IRS forms that list him as a director show an incorrect address for him.

IRS forms filed by Mr. Clements as recently as 2011 also listed Town Councilor-Elect Robert O. McNeil as treasurer of CARI, and Mr. Clements confirmed his status as treasurer in an email message on Friday.

But Mr. McNeil likewise said he was unaware he was listed as a board member, and has never acted as CARI’s treasurer.

“I’ve never seen the check book,” he said. “I’ve never seen any of the bills.”

Mr. McNeil said he has not attended meetings for CARI in roughly four years.

Until 2007, Mr. Clements said, the institute simply hadn’t gotten around to applying for an assessment change with the town.

Mr. Clements said the institute was paying roughly $25,000 in taxes to the town each year.

Because Mr. Teele agreed with the institute’s claim for tax-exemption and changed its assessment in 2012, Mr. Clements said, the litigation against the town has ended. He said attorneys for both sides are currently determining how much the town owes the institute for years the land was taxed.

Mr. Clements said the attorneys are working on a compromise that will see the town returning some, but not all, of the taxes the institute paid since 2007.

Town Councilor Gary J. Jarvis said he didn’t know what changed between 2011 and 2012 to make Mr. Teele feel that a tax exemption was warranted.

“That’s his call,” he said. “Once the assessor makes the decision the town can’t override it.”

Mr. Teele said Friday he couldn’t be sure what exactly changed from 2011 to 2012 without checking his records.

He said the institute will have to reapply for tax-exempt status yearly.

“Down the road there might be changes to make it not wholly exempt,” he said.

Earlier this year The Kitchen, a restaurant serving primarily locally sourced food, began leasing space at the institute. Prior to this year the Country Garden Restaurant was located at the institute.

“The crux of the thing is they never should have been made tax exempt. If you’re running a restaurant and you’re making money off it, how can you be tax exempt?” Mr. Dailey said. “I just see it as another way that the residential tax payers are being hung out to dry.”

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