A decision by the Tarrant County Appraisal District has denied the TCU Bookstore a full property tax exemption because it sells merchandise to the general public as well as students, a university official said.

Brian Gutierrez, vice chancellor for finance and administration, said the appraisal district proposed a settlement in August that would have made a portion of the bookstore tax exempt, but said TCU rejected the offer and is continuing to resolve the issue through the court system. The university filed a lawsuit against the appraisal district in April after it was denied tax exempt status in September 2007, said Diane Collins, the district’s director of support services.

“We initially denied tax exemption because the bookstore is not exclusively operated for educational purposes,” Collins said. TCU had qualified for tax exempt status before last year’s ruling.

According to the Texas Property Tax Code, property that benefits an institution of higher education is not taxable, as long as the contracted private business is not profiting from operations unrelated to the institution.

TCU maintains that the bookstore, like other college and university bookstores in Texas, should be exempt from property taxes because students rely on the bookstore for basic services that have always been viewed within the operating purpose of the university, Gutierrez said.

Llisa Lewis, general manager of the bookstore, said the store’s most popular items are TCU merchandise, which is considered typical collegiate material that Collins said qualifies for tax exemption.

“We continue to maintain the store is 100 percent exempt from property taxes,” Gutierrez said.

Collins said the bookstore’s location is one reason for the denial.

“The store is very unique because it’s on the corner of two major thoroughfares, as opposed to being deep within the campus setting,” Collins said.

TCU owns the bookstore, but has contracted out operating activity to Barnes & Noble rather than operate the bookstore on a daily basis, Gutierrez said.

“Some universities contract out many different services such as technology, housekeeping, etc.,” Gutierrez said. “Contracting out these services does not change the nature or purpose of a college or university.”

The appraisal district and TCU are currently working to resolve this matter.

“We want to make the right decision,” Collins said. “We’re definitely moving in a positive direction.”