Current through Register Vol. 23-24, December 15, 2023
(1)
Introduction. This section explains the property tax exemption
available under
RCW
84.36.550 to nonprofit organizations that
solicit or collect gifts, donations, or grants to be distributed to other
nonprofit organizations for character-building, benevolent, protective, or
rehabilitative social services.
(2)
Definitions. For purposes of this section, the following
definitions apply:
(a) "Benevolent" refers to
social services or programs that are directed at persons of all ages, that
arise from or are prompted by motives of charity or a sense of benevolence,
that are marked by a kindly disposition to promote the happiness and prosperity
of others, by generosity in and pleasure at doing good works, or that are
organized for the purpose of doing good. For example, a benevolent organization
may provide a food bank, a soup kitchen, or counseling services at
cost.
(b) "Gifts, donations, or
grants" means only amounts that are given or received as outright gifts. Any
amount, however designated, that is given or received in return for any goods,
services, or other benefits will not be considered a "gift, donation, or grant"
for the purposes of this rule. A "gift, donation, or grant" is an amount given
or received without conditions, from detached and disinterested generosity, out
of affection, respect, charity or like impulses and not because of any moral or
legal duty or from the expectation of anticipated benefits. For example, the
purchase of a "raffle ticket" or "bingo card" does not qualify as a "gift,
donation, or grant" because the sponsor of the raffle or bingo game is selling
a chance to win a prize and the participant is paying a portion of the purchase
price of that prize and is receiving the chance to receive the prize or prizes
in exchange for his or her payment.
(c) "Nonsectarian purpose" means a purpose
that is not associated with or limited to a particular religious
group.
(d) "Organization" includes
associations and corporations.
(e)
"Protective" refers to activities that are meant to cover, to guard, or to
shield other persons from injury or destruction or to save others from
financial loss. For example, a protective organization may provide housing for
battered persons or for the developmentally disabled or may assist persons with
behavioral problems by providing encouragement, support, and
training.
(f) "Rehabilitative or
rehabilitation" refers to activities designed to restore individuals to a
former capacity, to a condition of health, or to useful or constructive
activity. For example, a rehabilitative organization may assist persons to
overcome alcohol or substance abuse, or to overcome the effects of a physical
injury, stroke, or heart attack.
(g) "Social service" means programs designed
to help people resolve problems, become more self-sufficient, prevent
dependency, strengthen family relationships, and/or enhance the functioning of
individuals in society. These services include, but are not limited to,
programs in the general categories of:
(i)
Socialization and development; and
(ii) Therapy, help, rehabilitation, and
social protection.
(3)
Exemption. The real and
personal property owned by a nonprofit organization is exempt from taxation if
the property is owned by a nonprofit organization and is used to solicit or
collect gifts, donations, or grants for distribution to other nonprofit
organizations, associations, or corporations organized and conducted for
nonsectarian purposes that provide character-building, benevolent, protective,
or rehabilitative social services directed at persons of all ages. To qualify
for this exemption, the nonprofit organization must meet all of the following
conditions:
(a) Organized and conducted for
nonsectarian purposes;
(b)
Affiliated with a state or national organization that authorizes, approves, or
sanctions volunteer charitable fund-raising organizations;
(c) Qualified for exemption under section
501(c)(3) of the federal Internal Revenue Code;
(d) Governed by a volunteer board of
directors;
(e) Use the gifts,
donations, and grants solicited or collected for character-building,
benevolent, protective, or rehabilitative social services directed at persons
of all ages or distribute the gifts, donations, or grants in accordance with
(f) of this subsection;
(f)
Annually distribute gifts, donations, or grants to at least five other
nonprofit organizations, associations, or corporations organized and conducted
for nonsectarian purposes that provide character-building, benevolent,
protective, or rehabilitative social services directed at persons of all
ages.
(4)
Examples.
(a) The United Way
solicits and collects gifts, donations, and grants from numerous sources such
as government employees, private businesses, and corporate sponsors. The gifts,
donations, and grants received by the United Way are, in turn, distributed to
other nonprofit organizations, associations, and corporations that provide
character-building, benevolent, protective, or rehabilitative social services
directed at persons of all ages. The United Way does not necessarily provide
these social services itself but it does own property that is used to solicit
and collect gifts, donations, and grants. The United Way would be entitled to
receive this exemption if, in addition to owning and using the property to
solicit and collect gifts, donations, and grants, it meets all of the
conditions listed in subsection (3) of this section.
(b) A nonprofit organization owns real and
personal property that is used for bingo games, pull-tabs, and food services to
raise funds for the organization's charitable activities that are not conducted
at this location. Even if the nonprofit organization in this case is organized
for nonsectarian purposes, affiliated with a national organization that
authorizes, approves, and sanctions volunteer charitable fund-raising
organizations, classified as a section 501(c)(3) organization with the Internal
Revenue Service, and governed by a volunteer board of directors, the bingo
facility would not be entitled to an exemption because this property is not
used to solicit or collect gifts, donations, or grants because the purchase of
a bingo card is not a "gift, donation, or grant" within the meaning of this
rule.
(5)
Additional requirements. Any organization or association that
applies for a property tax exemption under this section must also comply with
the provisions of WAC
458-16-165. WAC
458-16-165 sets forth additional
conditions and requirements that must be complied with to obtain a property tax
exemption pursuant to
RCW
84.36.550.
Statutory Authority:
RCW
84.08.010 and
84.08.070. 94-15-041, §
458-16-215, filed 7/14/94, effective
8/14/94.