- The Washington Times - Friday, October 28, 2005

LITTLE ROCK, Ark. (AP) — The Arkansas Supreme Court yesterday rejected the state’s bid to collect $3.5 million in taxes from Bill Clinton’s presidential library foundation, ruling the nonprofit business was entitled to a tax break meant for economic development.

The court said unanimously that any legitimate business, including nonprofit ones, was entitled to the aid.

The William J. Clinton Presidential Foundation sought the tax break in 2002 as it built the $165 million museum complex on the south bank of the Arkansas River downtown. The state said the foundation wasn’t eligible, but the foundation argued that the library and museum center brought tourists and helped generate jobs.

“We are very pleased. We believed from the beginning that we qualified for this program,” foundation President Skip Rutherford said. “This sends the message that Arkansas is nonprofit friendly, and that nonprofits can be economic generators.”

The Arkansas Department of Economic Development didn’t dispute the economic benefits of the library — development in downtown Little Rock has soared since Mr. Clinton said in the 1990s that he would build his library here — but interpreted the tax-incentive law differently.

“All along this was a dispute about a tax incentive, not about the economic importance of the Clinton Presidential Library,” said Mitch Chandler, a spokesman for the economic agency.

The Arkansas Enterprise Zone Act of 1993 provided for refunds of sale and use taxes by “any legitimate business enterprise” that meets certain state guidelines, including whether the business serves as a corporate or regional headquarters, doesn’t sell material to the general public and employs 25 or more people.

Legislators added the words “for profit” to the law in 2003, but the Supreme Court noted that at the time the foundation applied for the tax break, the statute did not prohibit nonprofits from receiving it.

The state Supreme Court members are elected in nonpartisan races.

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