A pregnancy clinic is suing the city for tax-exempt status.

In a complaint filed last week in Rutland civil court, First Step Pregnancy Clinic argues that the city incorrectly denied their application for tax-exempt status at their Washington Street facility.

The clinic previously existed on West Street as the First Steps Pregnancy Center, moving and changing its name earlier this year. It offers free ultrasounds, counseling and supplies — and while offering information on adoption services, it does not offer information on abortion, birth control or STD testing.

The complaint states that the clinic is funded by private donors and that the property is used solely for its programs.

The Vermont Supreme Court has established a three-pronged test determining when a nonprofit’s property is tax-exempt — the property “must be dedicated unconditionally to public use” which benefits both an “indefinite class of persons” as well as society as a whole and must be “owned and operated on a not-for-profit basis.”

Available court filings do not indicate the reason the city denied the clinic, and City Attorney Matt Bloomer did not respond to inquiries Tuesday except to say that the city had not yet been served with the complaint. First Step’s lawyer, Kylie Peterson, declined to comment.

The city has lost two similar cases in recent years.

A 2016 appeal by the Rutland County Parent-Child Center went all the way to the Vermont Supreme Court, which ruled in favor of the nonprofit in 2017. The city had argued that the children and parents served by the center constituted a “discrete” population rather than the “indefinite class of persons” that state law said an organization needed to serve to earn the exemption, but the court found that the community as a whole benefited, even if indirectly, from the center’s services.

In 2018, a Rutland County civil court judge reached a similar conclusion regarding Mandala House, a program run by the Vermont Achievement Center working to reintegrate female convicts into the community, and overruled the city’s denial of its tax-exempt status.



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