Non Profit Organizations And Property Taxes
When it comes to non-profit organizations they do not fall into the property tax net not if the organization is really a non-profit one. Of course there are some stipulations but if they are what they say they dont pay - its as simple as that. How does one classify non-profit organizations? For one they should not be showing any profits - the money they get cannot generate profit. For another they have to be government-recognized in order to be eligible for this property tax waiver. Each state has its own laws as well when it comes to non-profit organizations so its best to find out what laws govern your state.
Which are the obvious non-profit organizations? They could be social service groups museums nursing homes hospitals schools churches and cemeteries. Also included could be any organization that is dedicated purely to the arts like music dance literary activities etc. A common hall for instance would qualify if it were being used for any of these purposes but left as it is would not be exempted. In order to qualify there will be a form that has to be filled out and submitted to a committee to be approved before you can stop paying property taxes.
Such organizations should be very vigilant that there is no profit-making activity associated with their property otherwise they could lose this favored status. All guidelines for non-profit organizations are very strict and flouting these will not pay. Any exemption as far as income tax is concerned will come into effect the following year not in the current year.
Lets take an example. Say for instance someone uses his home to hold Sunday services so in essence he is using it as a church. In this case he should be very careful to see that he does not use it for any other commercial activity. No tenants can be kept there nor can he put it to any use from which he will earn any profits. This will only lead to a disqualification.
Since the guidelines are so strict great care must be taken to pay attention to anything that can get you struck off the non-profit organization status. There will be a very careful review done too before this status is granted. The review and the examination will be careful and thorough and all records must be presented for scrutiny. This is done by the communitys historical society and is called a review process.