Current through Register Vol. 24-06, March 15, 2024
(1)
Introduction. This rule explains the property tax exemption
available under the provisions of
RCW
84.36.037 for real and personal property
owned by a nonprofit organization, association, or corporation and used
exclusively as a public meeting hall, public meeting place, or community
meeting hall.
(2)
Definitions. For purposes of this rule, the following definitions
apply:
(a) "Affiliate" means an association,
organization, or corporation that is a branch, unit, chapter, or appendant body
of the property owner.
(b)
"Property" means real or personal property owned by a nonprofit organization,
association, or corporation.
(c)
"Public gathering" means a meeting or event in which attendance is not limited
or restricted to only members of the organization, association, or corporation
that owns the property or members of an affiliate. Refer to subsection (4) of
this rule for examples of public gatherings.
(3)
Exemption. Real and personal
property owned by a nonprofit organization, association, or corporation and
used exclusively as a public assembly hall, public meeting place, or community
meeting hall will be exempt from taxation under the following conditions:
(a) Exclusive use. The property is used
exclusively for public gatherings and is available to any individual,
organization, association, or corporation that may desire to use or rent the
property. Membership in the organization, association, or corporation that owns
the property or membership in an affiliate of the property owner cannot be a
requirement or condition for those persons desiring to rent or use the
property.
(i) Availability of property. To
ensure the public is aware of the availability of the property, the property
owner must provide written notification to the public that the property is
available for use or rental. This written notification may include, but is not
limited to, advertising in community newsletters or websites, on facility
reader boards or signs, or in local newspapers. The property owner must make
substantial and actual efforts to ensure that the public knows that the
property is available for use or rental. Examples of substantial and actual
efforts by the owner to ensure public awareness of the property availability
can be found in subsection (4) of this rule.
(ii) Qualifying use of property. In a
calendar year, the total number of hours used for public gatherings, as that
term is defined in this rule, held at the property must exceed the total number
of hours used for nonpublic gatherings held at the property, regardless of
whether the owner, the owner's affiliate, or renter, hosted or benefited from
the public gathering.
(b)
Exemption for real property - Area. The area of real property exempt under this
rule may not exceed one acre including the building(s), the land under the
building(s), and any additional area needed for parking.
(c) Statement of availability and fees
required. The owner of the property must prepare and make available upon
request a schedule of fees, a policy on the availability of the facility, and
any restrictions on the use of the facility. The owner may impose conditions or
restrictions reasonably necessary to safeguard the property and to comply with
the purposes of this exemption.
(d)
Annual summary required. The owner must provide the department of revenue with
a detailed summary containing the following information regarding the manner in
which the exempt property was used during the preceding year:
(i) The name of the person, organization,
association, or corporation that used the property;
(ii) The date(s) on which the property was
used;
(iii) The purpose for which
the property was used;
(iv) Whether
the meeting or event was a public gathering;
(v) The duration of the meeting or
event;
(vi) The methods used to
advertise the availability of the property to the public;
(vii) The income derived from the rental of
the property; and
(viii) The
expenses incurred relating to the use of the
property.
(4)
Examples. Examples found in this rule identify a number of facts
and then state a conclusion. These examples should be used only as a general
guide. The tax results of other situations must be determined after a review of
all facts and circumstances.
(a) Example 1.
Prior to a member only meeting, a fraternal organization hosts a dinner at its
facility that is open to nonmembers. The fraternal organization advertised the
dinner on its website and reader board, which clearly conveyed the public could
attend. The dinner and the member only meeting are considered two separate
events. The dinner is considered a public gathering because nonmembers are
allowed to attend. However, the member only meeting following the dinner is not
considered a public gathering.
(b)
Example 2. A youth organization hosts a spaghetti feed at its facility to raise
money for a camping trip. The organization advertised the spaghetti feed in the
local newspaper, which stated nonmembers are allowed to attend. The spaghetti
feed is considered a public gathering.
(c) Example 3. A youth organization has
weekly club meetings at its facility. The weekly meetings are advertised on the
organization's public website as being open for nonmembers to also attend. The
weekly club meetings are considered public gatherings.
(d) Example 4. A member only organization
allows its public assembly hall to be rented for weddings, receptions,
reunions, funerals, and other special events. The organization advertises the
availability of its facility for rental by the public in a community
newsletter.
There are no restrictions on who can rent the hall, so these
events are considered public gatherings. However, if the ability to rent the
hall is based on membership in the owning organization or membership in an
affiliate of the owning organization, then the events would not be considered
public gatherings.
(e)
Example 5. A garden club offers horticultural workshops for a fee at its
facility one day each month. The workshop is advertised in the community
newsletter as being open to anyone who wants to attend. The workshops are
considered public gatherings because members of the public can attend, even if
registration and/or payment are required. Although a fee is charged, the
monthly workshops offered by the garden club do not count towards the 15-day
pecuniary gain limitation described in subsection (5)(a) of this rule because
the fee only covers the materials and supplies necessary to conduct the
workshop.
(f) Example 6. A member
only organization rents a public assembly hall for its monthly board meetings.
The board meetings are not open to the public. The organization that owns the
facility advertises its availability to the public in the local newspaper. The
two organizations are not affiliated with each other. Although the monthly
board meetings are not open to the public, they are considered public
gatherings for the purpose of this exemption because the rental of the facility
is not being restricted to only members of the owning organization or to
members of affiliates of the owning organization.
(5)
Use of property for pecuniary gain
or to promote business activities. If a public meeting hall, public
meeting place, or community meeting hall exempt under subsection (3) of this
rule is used for pecuniary gain or to promote business activities, the property
tax exemption will be lost. However, the exemption will not be lost if:
(a) 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;
(b)
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 (a) 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;
(c) In a county with a population of less
than 20,000 people, the exempt property is used to promote the following
business activities: Dance lessons; art classes; or music lessons. The rental
income or donations, if any, must be reasonable and not exceed the maintenance
and operation expenses attributable to the portion of the property loaned or
rented; or
(d) All income received
from the rental or use of the exempt property is used for capital improvements
to the exempt property, maintenance and operation expenses of the exempt
property, or exempt purposes.
(6)
Additional requirements. Any
nonprofit organization, association, or corporation that applies for a property
tax exemption under this rule must also comply with the provisions of WAC
458-16-165. WAC
458-16-165 provides additional
conditions and requirements that must be satisfied to obtain a property tax
exemption pursuant to
RCW
84.36.037.
Statutory Authority:
RCW
84.36.865,
RCW
84.36.037,
84.36.805,
84.36.815,
84.36.825 and
84.36.840. 98-18-006, §
458-16-300, filed 8/20/98, effective 9/20/98. Statutory Authority:
RCW
84.08.010,
84.08.070 and
chapter
84.36 RCW. 94-07-008,
§ 458-16-300, filed 3/3/94, effective 4/3/94. Statutory Authority:
RCW
84.36.865. 81-21-010 (Order PT 81-14), §
458-16-300, filed 10/8/81.