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S1160......................................by LOCAL GOVERNMENT AND TAXATION
PROPERTY TAX - EXEMPTIONS - Amends existing law to provide that certain
low-income housing is exempt from property taxation.
02/12 Senate intro - 1st rdg - to printing
02/13 Rpt prt - to Loc Gov
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-sixth Legislature First Regular Session - 2001
IN THE SENATE
SENATE BILL NO. 1160
BY LOCAL GOVERNMENT AND TAXATION COMMITTEE
1 AN ACT
2 RELATING TO PROPERTY EXEMPT FROM TAXATION OF FRATERNAL, BENEVOLENT OR CHARI-
3 TABLE CORPORATIONS OR SOCIETIES; AMENDING SECTION 63-602C, IDAHO CODE, TO
4 PROVIDE THAT CERTAIN LOW-INCOME HOUSING IS EXEMPT FROM TAXATION, TO PRO-
5 VIDE THAT THE LEASE OR USE OF ANY PROPERTY BY ANY SUCH CORPORATION OR
6 SOCIETY FOR LOW-INCOME HOUSING SHALL NOT BE DEEMED A BUSINESS OR COMMER-
7 CIAL PURPOSE, EVEN THOUGH FEES OR CHARGES BE IMPOSED AND REVENUE DERIVED
8 THEREFROM IF THE LOW-INCOME HOUSING SHALL BE INSURED, FINANCED OR ASSISTED
9 IN WHOLE OR IN PART THROUGH A FEDERAL OR STATE HOUSING PROGRAM ADMINIS-
10 TERED BY THE DEPARTMENT OF HEALTH AND WELFARE, THE IDAHO HOUSING AND
11 FINANCE ASSOCIATION OR THE FEDERAL DEPARTMENT OF HOUSING AND URBAN DEVEL-
12 OPMENT AND THE CORPORATION OR SOCIETY SHALL BE EXEMPT FROM TAXATION PUR-
13 SUANT TO SECTION 501(c)(3) OF THE INTERNAL REVENUE CODE; DECLARING AN
14 EMERGENCY AND PROVIDING RETROACTIVE APPLICATION.
15 Be It Enacted by the Legislature of the State of Idaho:
16 SECTION 1. That Section 63-602C, Idaho Code, be, and the same is hereby
17 amended to read as follows:
18 63-602C. PROPERTY EXEMPT FROM TAXATION -- FRATERNAL, BENEVOLENT, OR CHAR-
19 ITABLE CORPORATIONS OR SOCIETIES. The following property is exempt from taxa-
20 tion: property belonging to any fraternal, benevolent, or charitable corpora-
21 tion or society, low-income housing as provided below, the World War veteran
22 organization buildings and memorials of this state, used exclusively for the
23 purposes for which such corporation or society is organized; provided, that if
24 any building or property belonging to any such corporation or society is
25 leased by such owner or if such corporation or society uses such property for
26 business purposes from which a revenue is derived which, in the case of a
27 charitable organization, is not directly related to the charitable purposes
28 for which such charitable organization exists, then the same shall be assessed
29 and taxed as any other property, and if any such property is leased in part or
30 used in part by such corporation or society for such purposes the assessor
31 shall determine the value of the entire building and the value of the part
32 used or leased for commercial purposes. If the value of the part used for com-
33 mercial purposes is determined to be three percent (3%) or less than the value
34 of the entirety, the whole of said property shall remain exempt. If the value
35 of the part used for commercial purposes is determined to be more than three
36 percent (3%) of the value of the entirety, the assessor shall assess such pro-
37 portionate part of such building including the value of the real estate as is
38 so leased or used for such purposes, and shall assess all merchandise kept for
39 sale, and the trade fixtures used in connection with the sale of such merchan-
40 dise; provided however, that the lease or use of any property by any such cor-
41 poration or society for athletic or recreational facilities, residence halls
42 or dormitories, low-income housing, meeting rooms or halls, auditoriums or
43 club rooms within the purposes for which such corporation or society is orga-
2
1 nized, shall not be deemed a business or commercial purpose, even though fees
2 or charges be imposed and revenue derived therefrom. To receive an exemption
3 pursuant to this section, the low-income housing shall be insured, financed or
4 assisted in whole or in part through a federal or state housing program admin-
5 istered by the department of health and welfare, the Idaho housing and finance
6 association or the federal department of housing and urban development and the
7 corporation or society shall be exempt from taxation pursuant to section
8 501(c)(3) of the Internal Revenue Code.
9 SECTION 2. An emergency existing therefor, which emergency is hereby
10 declared to exist, this act shall be in full force and effect on and after its
11 passage and approval, and retroactively to January 1, 2000.
STATEMENT OF PURPOSE
RS 11066
This legislation would clarify the property tax exempt status of low
income rental property that is owned and operated exclusively by
non-profit charitable corporations or societies, specifically IRS
501(c)(3) qualified organizations. Currently, the law is being
interpreted differently and inconsistently by counties throughout the
state. Low income housing units owned and operated by non-profit
charitable organizations are being taxed by some counties and not by
other counties. This legislation establishes qualifications for both the
property and the charitable organization to ensure uniform application
of the exemption across the state.
FISCAL IMPACT
There would be not fiscal impact on the General Fund of the State of
Idaho. There would be a property tax shift from taxes currently being
paid by charitable organizations for this type of property to all other
property tax payers in the same jurisdiction. Currently, $107,189 is
paid in property taxes by non-profit charitable organizations across the
state for this kind of property.
Contact: Joe Stegner 332-1342
STATEMENT OF PURPOSE/FISCAL NOTE S 116