Friday, November 06, 2009

Non-Profits & Property Taxes

Don't non-profits already pay property taxes?

Churches own property, do they pay property taxes? What about private schools? What about charter schools? What about state universities that keep buying up land? What about thrift stores?

And how big a hit would paying property taxes be to non-profit organizaitons that owned property? How do you assess the property value of a non-profit organization?

A Georgia State Court of Appeals ruling now forces me to ask these questions that I never really examined much before.

The long and short of the case is that an Athens non-profit, Nuci's Space, collects money by renting out music practice spaces, instruments, recording time, event space for parties and concerts, and selling beverages to patrons during events. A new county ordinance labels this as "commercial activity," despite the fact that providing below-cost services is both a part of their mission, and any significant money they make from those transactions support the other part of their mission of service -providing mental health counseling to local musicians who have no means of acquiring health care. (Yes, I am a huge Nuci's Space fan, and wish we had anything similar to this in New Orleans) Most of their income arrives from donations and grants, but they do own the Downtown Athens property in which they are housed.

So, of course, the county wants to put the screws to this organization that helps fuel and support one of Athens' more dynamic city brands (that as a music scene).

But what of my questions? If a church isn't already paying property taxes, but they make money renting out their facility for these things called "weddings," can they now have their property taxed becasue they "engage in commercial activity?" What if they engage in bake sales or car washes, even if the purpose of those events is to raise money for church trips or mission work?

Looking down the road, how will this affect major donations and grants that non-profits seek, now that funding organizations know part of their award will have to go to the county? Especially if the funding organizaiton is a state or federal source?

Lot of worms comin' out of this can. Stay tuned.

HT: JMac at Beyond the Trestle.

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