RALEIGH - Classified under state law as a "dormitory," the College Inn apartment complex operates under a county tax exemption awarded to N.C. State's officials athletics booster club -- an exemption that saves the club from paying more than $132,000 in property taxes each year.

The College Inn and the land it sits on is valued at $22.9 million.

Wake County awarded the Wolfpack Club the tax exemption last year after the booster club cited a law passed in 2004 that exempts certain "higher education property" from taxation.

The bill was introduced in the General Assembly at the same time the College Inn was under construction. But records indicate the bill was the result of a dispute between Appalachian State University, the city of Boone and Watauga County concerning the municipalities' efforts to collect taxes on an apartment complex built by a nonprofit corporation there set up to receive money held in trust for the university.

The law expanded property tax exemptions for educational entities to include property owned by a nonprofit entity that is "used wholly and exclusively for educational purposes." The phrase "educational purposes" is broadly defined in the law to include the operation of student housing and dining facilities, golf courses, tennis courts and sports arenas "for the use of students or faculty."

Bobby Purcell, the Wolfpack Club's executive director, said the booster club built the apartment complex with the sole purpose to generate revenue for the boosters, which help fund athletic scholarships for N.C. State student-athletes, and to provide student housing.

"We went through our due diligence on the process," Purcell said. "It was not built for athletic housing, it was built for student housing."

The granting of the Wolfpack Club's tax exemption has raised few questions among those who opposed the law.

Rep. Paul Luebke, a Durham Democrat, voted against the bill, but when asked for his reaction to the tax exemption now claimed by the Wolfpack Club, he e-mailed back, "Unfortunately, I can't help with your story because I do not remember the reason I opposed the bill."

Another state legislator who cast a vote against the bill, Republican Rep. John Blust of Greensboro, said he wonders whether the Wolfpack Club's exemption was proper.

"I don't think the taxpayers mind footing the bill for legitimate educational expenses, but somewhere there's a fine line in there where you cross it, and athletics isn't a part of that. Or at least athletic boosters," Blust said. "I can't tell you chapter and verse exactly what should be done and where the line should be drawn, but I think they're pushing up against and maybe going across the proper line. ... I think we've got to be careful about what the taxpayers need to subsidize on behalf of the university and what they don't."

All the money generated by the College Inn is currently going toward the apartment's construction debt, Purcell said. Once it's paid off, he said, that money will go toward funding NCSU athletic scholarships.