RE: [npEnterprise] Re property tax issues
At the end of the email summarizing the comments on property tax issue this question was raised:
(5) From Nate Palma
Our nonprofit school is leasing a building in central Phoenix. Does the property tax issue come into consideration under the lease agreement?
If so, please share some insight.
Nate, as noted earlier in the responses to the property tax issue, property taxes are strictly determined at the state and/or local level. However, the question regarding a property tax exemption for leased property is generally consistent between all jurisdictions. Property tax exemptions run to the property owner. If the property owner is a for-profit (i.e. an individual or company) then there is no possibility of an exemption. If you are renting space from another nonprofit, that organization may or may not qualify, depending upon its mission and the applicable laws, for an exemption. For example, in Washington State an organization that qualifies for one of the few property tax exemptions could keep that exemption on the space rented to you only if your use of the property was consistent with those activities that gained the property tax exemption. If your activities are not related to the exempt activities of your landlord, that nonprofit would lose its exemption.
Again, your state and local laws are the final determination on this, but these principles about leased property and property tax exemptions are generally consistent across the nation.
Senior Program Officer
Ben B. Cheney Foundation