The nonprofit sector in the U.S relishes benefits in tax law. According to Curt Ranta, property tax exemption is a substantial and preferential treatment a nonprofit company or organization can qualify for on the local and state level.

Curt Ranta, said, Because most nonprofit institutions do not generate higher returns on investments (ROIs) and often fail to receive significant charitable contributions, exemption from taxes, especially estate taxes, can streamline operations and provide financial benefits.

So, what is property tax welfare exemption? Why is it important? Today's article will answer these questions based on Curt Ranta's research and insights. Read on!

What is Property Tax Welfare Exemption?

Tax welfare is a prominent and growing exemption under the property tax law in California. Individuals and organizations often misunderstand the exemption law. According to Curt Ranta, most organizations think that the tax welfare exemption is applicable to all charities, exempting them from IRC & 501 (c) (3).

However, this is a misconception. Curt Ranta's research on law shows that a charity is not entitled to tax welfare exemption in California because the Federal tax law grants its tax-exempt status.

So, it is crucial to meet the IRC & 501 (c) (3) requirements to get the welfare exemption. Otherwise, an organization may not leverage this opportunity. According to California's law, organizations are eligible for tax welfare exemption when their operational purpose is religious, hospital, charitable, or scientific.

When you apply for the welfare exemption, the authority will evaluate your organization's mission/aim/purpose/operation and decide whether you can get full or partial exemption from property taxes.

Remember, this depends on how much you use your property for charitable, hospital, scientific, or religious purposes. You can leverage California's property tax welfare exemption when you meet the requirements. Therefore, Curt Ranta recommends all nonprofit organizations perform thorough research and get all the necessary information before applying.

The Importance of Property Tax Welfare Exemption

According to Curt Ranta, various approaches justify property tax welfare exemptions for religious, scientific, charitable, hospital, and other nonprofit organizations. Tax exemption is a subsidy the government grants to the nonprofit sector to support and encourage the general public in California to use services offered by nonprofit organizations.

Curt Ranta argues that this consistent approach justifies the Federal income tax exemption for nonprofits and charities under the IRC & 501 (c) (3) according to IRC 170. It is crucial to subsidize charitable organizations and the nonprofit sector if they use their properties for the socio-economic benefits of the general public.

In addition, the government must grant nonprofit organizations a property tax exemption because they don't leverage government benefits on a large scale. Curt Ranta believes that property tax exemptions serve as a complement to avoid complications and correct deficiencies in the income tax.

However, nonprofit and charitable organizations categorized as religious, scientific, or hospital do not owe federal income tax. When these organizations are exempted from property taxes, they can save money and spend it on the welfare of society, leading to healthier, happier, and financially stable communities.

In addition to charities, property tax welfare exemption also include other activities, such as educational, environmental protection, and housing for older adults. According to Curt Ranta, organizations must meet the Rev & Tax Code 214 (7) and use their property for charitable, hospital, religious, or scientific purposes. Otherwise, authorities may not accept their application for property tax welfare exemption.

How to Apply For Property Tax Exemption?

If you run an organization and seek exemption for the first time, you must follow the step-by-step approach to streamline the application process. According to Curt Ranta, the process requires you to file a claim with the California Board of Equalization for the organizational clearance certificate.

Likewise, you need to file a claim with the county assessor for the welfare exemption. Make sure you do this in the county where you use your property. The California Board of Equalization will determine whether your organization is eligible for the property tax welfare exemption.

As mentioned earlier, your organization must operate exclusively for charitable, hospital, scientific, or religious purposes. Here are a few things to consider when applying for California's property tax welfare exemption.

●Organizational Clearance Certificate

oTax-exempt Status Letter

oFinancial Statements

oActivities

●Claim for the Welfare Exemption

oFirst Filing: BOE-267, Claim for Welfare Exemption

oAnnual Filing: BOE-267-A, Claim for Welfare Exemption

Final Words

Organizations, companies, and institutions that operate exclusively for the welfare and benefit of society can apply for property tax exemption in California. The purpose is to reduce the financial burden and use funds for society's health, safety, and wellbeing. Until Next Time!