Current through Register Vol. 24-06, March 15, 2024
(1)
Introduction. This rule explains the property tax exemption
available under the provisions of
RCW
84.36.020 to churches, parsonages, and
convents.
(2)
Definitions. For purposes of this rule, the following definitions
apply:
(a) "Church purposes" means the use of
real and personal property owned by a nonprofit religious organization for
religious worship or related administrative, educational, eleemosynary, and
social activities. This definition is to be broadly construed. The term "use"
includes real property owned by a nonprofit religious organization upon which a
church will be built.
(b) "Clergy
person" means a person ordained or regularly licensed for religious service and
includes both male and female individuals.
(c) "Commercial" refers to an activity or
enterprise that has profit making as one of its primary purposes.
(d) "Convent" means a house or set of
buildings occupied by a community of clergy or nuns devoted to religious life
under a superior.
(e)
"Eleemosynary" means charitable, including types of activities in which some
social objective is served or general welfare is advanced.
(f) "Owned" means owned in fee or by contract
purchase.
(g) "Parsonage" means a
residence, owned by a church, that is occupied by a clergy person designated
for a particular congregation and who holds regular services for that
congregation.
(h) "Regular
services" means religious services that are conducted on a routine and
systematic basis at prearranged times, days, and places. This term includes
religious services that are conducted by a visiting or circuit clergy person
who may only hold services once a month in a particular location if that person
is scheduled to conduct services on a routine and prearranged basis on the
exempt property.
(i) "Unoccupied
land" means land that is undeveloped, unused, and upon which no structures or
improvements have been built.
(i) This land
includes, but is not limited to, greenbelt, wetland, and other undeveloped
areas contiguous to an exempt church, parsonage, or convent.
(ii) This land does not include parking lots,
landscaped grounds, or playing fields.
(3)
Property exempt and extent of
exemption. The church and the ground upon which a church is or will be
built, together with a parsonage, convent, structures and ground necessary for
street access, parking, light, ventilation, and buildings and improvements
required to maintain and safeguard the property owned by a nonprofit religious
organization and wholly used for church purposes will be exempt from property
taxation to the following extent:
(a) The
exempt area must not exceed five acres of land, including ground that is
occupied and unoccupied. Occupied ground is ground covered by the church,
parsonage, convent, structures and ground necessary for street access, parking,
light, ventilation, and buildings and improvements required for the maintenance
and security of such property.
(b)
The unoccupied land included within this five-acre limitation may not exceed
one-third of an acre 14,400 square feet), unless additional unoccupied land is
required to conform with state or local codes, zoning, or licensing
requirements.
(4)
Noncontiguous property. A parsonage or convent may qualify for
exemption even if located on land that is not contiguous to the church
property; however, the five acre limitation still applies, as does the
limitation described in subsection (3)(b) of this rule with respect to
unoccupied land.
(5)
Exemption of caretaker's residence. A caretaker's residence
located on church property may qualify for exemption if the following
conditions are met:
(a) The caretaker's duties
include regular surveillance and patrolling of the property;
(b) The size of the residence is reasonable
and appropriate in light of the caretaker's duties and the size of the exempt
property;
(c) The caretaker is
required to provide either security or maintenance service described as
follows:
(i) Security of the premises is
provided by the caretaker, not merely by his or her presence, but by regular
surveillance and patrolling of the grounds, locking gates if necessary, and
generally acting in a manner to ensure the security of the property;
or
(ii) Maintenance service is
provided on a daily basis to open and close the premises, activate or shut down
environmental systems, and provide other maintenance and custodial services
necessary for the effective operation and utilization of the facilities;
and
(d) The caretaker
receives the use of the residence as part of his or her compensation and does
not pay rent. Reimbursement of utilities expenses created by the caretaker's
presence will not be considered as rent.
(6)
Property not used for church
purposes. Except as provided in this rule, when property is not used for
church purposes, the exemption is lost. If a portion of the exempt property is
used for commercial rather than church purposes, that portion must be
segregated and taxed whether or not the proceeds received by the church from
the commercial use are applied to church purposes.
(7)
Loan, rental, or use of exempt
property. If the rental income or donations, if any, are reasonable and
do not exceed the maintenance and operation expenses attributable to the
portion of the property being loaned or rented, the tax exempt status of any
property exempt under this rule will not be affected by:
(a) The loan or rental to a nonprofit
organization, association, corporation, or school to conduct eleemosynary
activities;
(b) The rental or use
of the property by any individual, group, or entity, where such rental or use
is not otherwise authorized by this rule, for not more than 50 days in each
calendar year, and the property is not used for pecuniary gain or to promote
business activities for more than 15 of the 50 days in each calendar year. The
50 and 15-day limitations do not include days for setup and takedown activities
preceding or following a meeting or event;
(c) The rental or use of the property by any
individual, group, or entity, to conduct activities related to a qualifying
farmers market for up to 53 days each calendar year. The 15-day and 50-day
limitations provided in (b) of this subsection do not apply to the use of the
property for pecuniary gain or for business activities if the property is used
for activities related to a qualifying farmers market, and all income received
from the rental or use of the exempt property is used for capital improvements
to the exempt property, maintenance and operation of the exempt property, or
exempt purposes. For purposes of this rule, "qualifying farmers market" has the
same meaning as "qualifying farmers market" as defined in
RCW
66.24.170; or
(d) An inadvertent use of the property in a
manner inconsistent with the purpose for which the exemption was granted, if
the inadvertent use is not part of a pattern of use. A pattern of use is
presumed when an inadvertent use is repeated in the same assessment year or in
two or more successive assessment years.
(8)
Fund-raising events. The use
of exempt property for fund-raising events sponsored by an exempt organization,
association, or corporation does not subject the property to taxation if the
fund-raising events are consistent with the purposes for which the exemption
was granted. The term "fund-raising" means any revenue-raising event limited to
less than five days in length, that disburses 51 percent or more of the profits
realized from the event to the exempt nonprofit organization, association, or
corporation that is holding the fund-raising, and that takes place on exempt
property.
(a) Example 1. An exempt nonprofit
social service agency holds an art auction in the church basement to raise
funds. Since the fund-raising event is being held on exempt property, the event
must be less than five days in length and 51 percent of the profits must be
disbursed to the social service agency.
(b) Example 2. A church's auxiliary has a
candy sale to raise funds for the church's program to provide meals to the
homeless during which the candy is sold door-to-door by members of the
auxiliary. Since the candy sale is not being held on the exempt property, the
sale is not limited to five days in duration nor do 51 percent of the profits
from this fund-raising event have to be remitted to the church.
Statutory Authority:
RCW
84.08.010,
84.08.070 and
chapter
84.36 RCW. 94-07-008,
§ 458-16-190, filed 3/3/94, effective 4/3/94. Statutory Authority:
RCW
84.36.865. 82-22-060 (Order PT 82-8), §
458-16-190, filed 11/2/82; 81-21-009 (Order PT 81-13), § 458-16-190, filed
10/8/81; Order PT 77-2, § 458-16-190, filed 5/23/77; Order PT 76-2, §
458-16-190, filed 4/7/76. Formerly WAC
458-12-195.