City of Nome Equalization Board v. Norton Sound Health Corporation

Summary

The Alaska Supreme Court affirmed the superior court's judgment exempting NSHC's seven-unit staff apartment building in Nome from property taxation under AS 29.45.030(a)(3). The court held that housing medical staff near a hospital serves 'hospital purposes,' but that the apartments were not used 'exclusively' for hospital purposes because tenants also used them as private residences; the building was nonetheless exempt because its use was directly incidental to and vitally necessary for hospital operations in remote Nome, where no feasible short-term rentals exist. The court further held that the nominal rent NSHC charges some tenants does not defeat the exemption on this record, because the City raised the rental-income argument for the first time on appeal and the Board made no findings under the Catholic Bishop rental-income test. The court declined to reach NSHC's alternative charitable-purpose exemption and implied federal preemption arguments.