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In order to qualify for an exemption under this chapter, the nonprofit organizations, associations, or corporations must satisfy the conditions in this section.
The property must be used exclusively for the actual operation of the activity for which exemption is granted, unless otherwise provided, and does not exceed an amount reasonably necessary for that purpose. Notwithstanding anything to the contrary in this section:
The loan or rental of the property does not subject the property to tax if:
The rents and donations received for the use of the portion of the property are reasonable and do not exceed the maintenance and operation expenses attributable to the portion of the property loaned or rented;
Except for the exemptions under RCW 84.36.030(4), 84.36.037, 84.36.050, and 84.36.060(1) (a) and (b), the property would be exempt from tax if owned by the organization to which it is loaned or rented; and
This subsection (2)(a) does not apply to exemptions granted under RCW 84.36.042;
The use of the property for fund-raising events does not subject the property to tax if the fund-raising events are consistent with the purposes for which the exemption is granted or are conducted by a nonprofit organization. If the property is loaned or rented to conduct a fund-raising event, the requirements of (a) of this subsection (2) apply;
An inadvertent use of the property in a manner inconsistent with the purpose for which exemption is granted does not subject the property to tax, if the inadvertent use is not part of a pattern of use. A pattern of use is presumed when an inadvertent use is repeated in the same assessment year or in two or more successive assessment years.
The facilities and services must be available to all regardless of race, color, national origin or ancestry.
The organization, association, or corporation must be duly licensed or certified where such licensing or certification is required by law or regulation.
Property sold to organizations, associations, or corporations with an option to be repurchased by the seller does not qualify for exempt status. This subsection does not apply to:
Limited equity cooperatives as defined in RCW 84.36.675; or
Property sold to a nonprofit entity, as defined in RCW 84.36.560, by:
A nonprofit as defined in RCW 84.36.800 that is exempt from income tax under 26 U.S.C. Sec. 501(c) of the federal internal revenue code;
A governmental entity established under RCW 35.21.660, 35.21.670, or 35.21.730;
A housing authority created under RCW 35.82.030;
A housing authority meeting the definition in RCW 35.82.210(2)(a); or
A housing authority established under RCW 35.82.300.
The department must have access to its books in order to determine whether the nonprofit organization, association, or corporation is exempt from taxes under this chapter.
This section does not apply to exemptions granted under RCW 84.36.020, 84.36.032, 84.36.250, and 84.36.480(2).
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The use of property exempt under this chapter, other than as specifically authorized by this chapter, nullifies the exemption otherwise available for the property for the assessment year. However, the exemption is not nullified by the use of the property by any individual, group, or entity, where such use is not otherwise authorized by this chapter, 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 provided in this subsection (8)(a) do not include days during which setup and takedown activities take place immediately preceding or following a meeting or other event by an individual, group, or entity using the property as provided in this subsection (8)(a).
If uses of the exempt property exceed the 50 and 15-day limitations provided in (a) of this subsection (8) during an assessment year, the exemption is removed for the affected portion of the property for that assessment year.
The 15-day and 50-day limitations provided in (a) of this subsection (8) do not apply to property exempt under RCW 84.36.037 if the property is used for activities related to a qualifying farmers market, as defined in RCW 66.24.170, and all income received from 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. Exempt property under RCW 84.36.037 may be used for up to 53 days for the purposes of a qualifying farmers market.
In order to qualify for an exemption under this chapter, the nonprofit organizations, associations, or corporations must satisfy the conditions in this section.
The property must be used exclusively for the actual operation of the activity for which exemption is granted, unless otherwise provided, and does not exceed an amount reasonably necessary for that purpose. Notwithstanding anything to the contrary in this section:
The loan or rental of the property does not subject the property to tax if:
The rents and donations received for the use of the portion of the property are reasonable and do not exceed the maintenance and operation expenses attributable to the portion of the property loaned or rented;
Except for the exemptions under RCW 84.36.030(4), 84.36.037, 84.36.050, and 84.36.060(1) (a) and (b), the property would be exempt from tax if owned by the organization to which it is loaned or rented; and
This subsection (2)(a) does not apply to exemptions granted under RCW 84.36.042;
The use of the property for fund-raising events does not subject the property to tax if the fund-raising events are consistent with the purposes for which the exemption is granted or are conducted by a nonprofit organization. If the property is loaned or rented to conduct a fund-raising event, the requirements of (a) of this subsection (2) apply;
An inadvertent use of the property in a manner inconsistent with the purpose for which exemption is granted does not subject the property to tax, if the inadvertent use is not part of a pattern of use. A pattern of use is presumed when an inadvertent use is repeated in the same assessment year or in two or more successive assessment years.
The facilities and services must be available to all regardless of race, color, national origin or ancestry.
The organization, association, or corporation must be duly licensed or certified where such licensing or certification is required by law or regulation.
Property sold to organizations, associations, or corporations with an option to be repurchased by the seller does not qualify for exempt status. This subsection does not apply to property sold to a nonprofit entity, as defined in RCW 84.36.560(7), by:
A nonprofit as defined in RCW 84.36.800 that is exempt from income tax under 26 U.S.C. Sec. 501(c) of the federal internal revenue code;
A governmental entity established under RCW 35.21.660, 35.21.670, or 35.21.730;
A housing authority created under RCW 35.82.030;
A housing authority meeting the definition in RCW 35.82.210(2)(a); or
A housing authority established under RCW 35.82.300.
The department must have access to its books in order to determine whether the nonprofit organization, association, or corporation is exempt from taxes under this chapter.
This section does not apply to exemptions granted under RCW 84.36.020, 84.36.032, 84.36.250, and 84.36.480(2).
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The use of property exempt under this chapter, other than as specifically authorized by this chapter, nullifies the exemption otherwise available for the property for the assessment year. However, the exemption is not nullified by the use of the property by any individual, group, or entity, where such use is not otherwise authorized by this chapter, for not more than fifty days in each calendar year, and the property is not used for pecuniary gain or to promote business activities for more than fifteen of the fifty days in each calendar year. The fifty and fifteen-day limitations provided in this subsection (8)(a) do not include days during which setup and takedown activities take place immediately preceding or following a meeting or other event by an individual, group, or entity using the property as provided in this subsection (8)(a).
If uses of the exempt property exceed the fifty and fifteen-day limitations provided in (a) of this subsection (8) during an assessment year, the exemption is removed for the affected portion of the property for that assessment year.
The 15-day and 50-day limitations provided in (a) of this subsection (8) do not apply to property exempt under RCW 84.36.037 if the property is used for activities related to a qualifying farmers market, as defined in RCW 66.24.170, and all income received from 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. Exempt property under RCW 84.36.037 may be used for up to 53 days for the purposes of a qualifying farmers market.
All real property is exempt from state and local property taxes if owned by:
A nonprofit entity, or a qualified cooperative association, for the purpose of developing or redeveloping on the real property one or more residences to be sold to low-income households including land to be leased as provided in subsection (10)(f)(ii) of this section; or
A nonprofit entity for the purpose of selling the real property to a low-income household who enters into an agreement with the nonprofit to build, or have built, through a qualified mutual self-help housing program a residence on the real property.
The exemption provided in this section expires on or at the earlier of:
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For purposes of the exemption provided in subsection (1)(a) of this section, the date on which the nonprofit entity transfers title to the single-family dwelling unit or the date on which the qualified cooperative association first conveys, directly or indirectly through the transfer of an ownership interest in the association, any single-family dwelling unit on the property or any part of the property; or
For purposes of the exemption provided in subsection (1)(b) of this section, the date on which the nonprofit entity transfers title to the real property to the low-income household;
The date on which the nonprofit entity or qualified cooperative association executes a lease of land described in subsection (10)(f)(ii) of this section;
The end of the seventh consecutive property tax year for which the property is granted an exemption under this section or, if the nonprofit entity or qualified cooperative association has claimed an extension under subsection (4) of this section, the end of the tenth consecutive property tax year for which the property is granted an exemption under this section; or
The property is no longer held for the purpose for which the exemption was granted.
The exemption under this section does not expire as a consequence of the real property being transferred by one nonprofit entity to another nonprofit entity or to a qualified cooperative association so long as the transferee timely applies to the department and is approved for a continuation of the exemption.
If the nonprofit entity believes that title to the single-family dwelling unit, or title of the real property exempt under subsection (1)(b) of this section, will not be transferred by the end of the sixth consecutive property tax year or if a qualified cooperative association believes that neither a single-family dwelling unit nor any other part of the property will be transferred by the end of the sixth consecutive property tax year, the nonprofit entity or qualified cooperative association may claim a three-year extension of the exemption period by:
Filing a notice of extension with the department on or before March 31st of the sixth consecutive property tax year; and
Providing a filing fee equal to the greater of $200 or 0.1 percent of the real market value of the property as of the most recent assessment date with the notice of extension. The filing fee must be deposited into the state general fund.
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Except as provided in subsection (6) of this section, if the nonprofit entity has not transferred title to the single-family dwelling unit to a low-income household or title to the real property exempt under subsection (1)(b) of this section to a low-income household, or if a qualified cooperative association has not transferred either a single-family dwelling unit or any other property, within the applicable period described in subsection (2)(c) of this section, or if the nonprofit entity or qualified cooperative association has converted the property to a purpose other than the purpose for which the exemption was granted, the property is disqualified from the exemption.
Upon disqualification, the county treasurer must collect an additional tax equal to all taxes that would have been paid on the property but for the existence of the exemption, plus interest at the same rate and computed in the same way as that upon delinquent property taxes.
The additional tax must be distributed by the county treasurer in the same manner in which current property taxes applicable to the subject property are distributed. The additional taxes and interest are due in full 30 days following the date on which the treasurer's statement of additional tax due is issued.
The additional tax and interest is a lien on the property. The lien for additional tax and interest has priority to and must be fully paid and satisfied before any recognizance, mortgage, judgment, debt, obligation, or responsibility to or with which the property may become charged or liable. If a nonprofit entity or qualified cooperative association sells or transfers real property subject to a lien for additional taxes under this subsection, such unpaid additional taxes must be paid by the nonprofit entity or qualified cooperative association at the time of sale or transfer. The county auditor may not accept an instrument of conveyance unless the additional tax has been paid. The nonprofit entity, qualified cooperative association, or the new owner may appeal the assessed values upon which the additional tax is based to the county board of equalization in accordance with the provisions of RCW 84.40.038.
The exemption under this section does not expire as a consequence of the real property being transferred to another nonprofit organization, association, or corporation for a use that also qualifies for and is granted an exemption under this chapter.
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Nonprofit entities receiving an exemption under subsection (1)(a) of this section must immediately notify the department when the exempt real property becomes occupied. The notice of occupancy made to the department must include a certification by the nonprofit entity that the occupants are a low-income household and a date when the title to the single-family dwelling unit was or is anticipated to be transferred.
Qualified cooperative associations receiving an exemption under this section must immediately notify the department when any portion of the exempt real property becomes occupied as well as when all of the exempt real property becomes occupied. The notice provided when all the exempt real property becomes occupied must be filed within one year of all exempt real property becoming occupied and demonstrate that the qualified cooperative association does, in fact, meet the requirements for being a qualified cooperative association.
Nonprofit entities receiving an exemption under subsection (1)(b) of this section must immediately notify the department when the exempt real property is sold to the low-income household. The notice must include a date when the title to the real property was or is anticipated to be transferred and a certification by the nonprofit entity that the purchaser is a low-income household.
The department of revenue must make the notices of occupancy and real property transfers under (c) of this subsection available to the joint legislative audit and review committee, upon request by the committee, in order for the committee to complete its review of the tax preference in this section.
Upon cessation of the exemption, the value of new construction and improvements to the property, not previously considered as new construction, must be considered as new construction for purposes of calculating levies under chapter 84.55 RCW. The assessed value of the property as it was valued prior to the beginning of the exemption may not be considered as new construction upon cessation of the exemption.
Nonprofit entities and qualified cooperative associations receiving an exemption under this section must provide annual financial statements to the joint legislative audit and review committee, upon request by the committee, for the years that the exemption has been claimed. The nonprofit entity or qualified cooperative associations must identify the line or lines on the financial statements that comprise the percentage of revenues dedicated to the development of affordable housing.
The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.
"Financial statements" means an audited annual financial statement and a completed United States treasury internal revenue service return form 990 for organizations exempt from income tax.
"Low-income household" means a single person, family, or unrelated persons living together whose adjusted income is less than 80 percent of the median family income, adjusted for family size as most recently determined by the federal department of housing and urban development for the county in which the property is located.
"Nonprofit entity" means a nonprofit as defined in RCW 84.36.800 that is exempt from federal income taxation under 26 U.S.C. Sec. 501(c)(3) of the federal internal revenue code of 1986, as amended.
"Qualified cooperative association" means a cooperative association formed under chapter 23.86 or 24.06 RCW that owns the real property for which an exemption is sought under this section and following the completion of the development or redevelopment of such real property:
60 percent or more of the residences are owned by low-income households; and
80 percent or more of the square footage of any improvements to the real property are exclusively used or available for use by the owners of the residences.
"Qualified mutual self-help housing program" is a program dedicated to supporting the building of residences for low-income households in Washington through a mutual self-help construction method by which multiple low-income households use their own labor to reduce total construction costs of their residences. The program must also be:
Operated by a nonprofit entity; and
Receiving financial support from the United States department of agriculture's mutual self-help housing technical assistance grant program or its successor program.
"Residence" means:
A single-family dwelling unit whether such unit be separate or part of a multiunit dwelling; and
The land on which a dwelling unit described in (f)(i) of this subsection (10) stands, whether to be sold, or to be leased for life or 99 years, to the low-income household owning such dwelling unit.
The department may not accept applications for the initial exemption in this section after December 31, 2027. The exemption in this section may not be approved for and does not apply to taxes due in 2038 and thereafter.
To be exempt under this section, the property must be used exclusively for the purposes for which the exemption is granted, except as otherwise provided in this section or RCW 84.36.805.
This section expires January 1, 2038.
In order to qualify for exempt status for any real or personal property under this chapter except personal property under RCW 84.36.600, all foreign national governments; cemeteries; nongovernmental nonprofit corporations, organizations, and associations; hospitals owned and operated by a public hospital district for purposes of exemption under RCW 84.36.040(2); and soil and water conservation districts must file an initial application on or before March 31st with the state department of revenue. However, the initial application deadline for the exemption provided in RCW 84.36.049 is July 1st for 2016 and March 31st for 2017 and thereafter. All applications must be filed on forms prescribed by the department and must be signed by an authorized agent of the applicant.
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In order to requalify for exempt status, all applicants except nonprofit cemeteries and nonprofits receiving the exemptions under RCW 84.36.560 or 84.36.675 must file an annual renewal declaration on or before March 31st each year. The renewal declaration must be on forms prescribed by the department of revenue and must contain a statement certifying the exempt status of the real or personal property owned by the exempt organization. This renewal declaration may be submitted electronically in a format provided or approved by the department. Information may also be required with the renewal declaration to assist the department in determining whether the property tax exemption should continue.
In order to requalify for exempt status, nonprofits receiving the exemptions under RCW 84.36.560 or 84.36.675 must file a renewal declaration on or before March 31st of every third year following initial qualification for the exemption. Except for the annual renewal requirement, all other requirements of (a) of this subsection apply.
When an organization acquires real property qualified for exemption or converts real property to exempt status, the organization must file an initial application for the property within sixty days following the acquisition or conversion in accordance with all applicable provisions of subsection (1) of this section. If the application is filed after the expiration of the 60-day period, a late filing penalty is imposed under RCW 84.36.825.
When organizations acquire real property qualified for exemption or convert real property to an exempt use, the property, upon approval of the application for exemption, is entitled to a property tax exemption for property taxes due and payable the following year. If the owner has paid taxes for the year following the year the property qualified for exemption, the owner is entitled to a refund of the amount paid on the property so acquired or converted.
The department must share approved initial applications for the tax preferences provided in RCW 84.36.049 and 84.36.675 with the joint legislative audit and review committee, upon request by the committee, in order for the committee to complete its review of the tax preferences provided in RCW 84.36.049 and 84.36.675.
In order to qualify for exempt status for any real or personal property under this chapter except personal property under RCW 84.36.600, all foreign national governments; cemeteries; nongovernmental nonprofit corporations, organizations, and associations; hospitals owned and operated by a public hospital district for purposes of exemption under RCW 84.36.040(2); and soil and water conservation districts must file an initial application on or before March 31st with the state department of revenue. However, the initial application deadline for the exemption provided in RCW 84.36.049 is July 1st for 2016 and March 31st for 2017 and thereafter. All applications must be filed on forms prescribed by the department and must be signed by an authorized agent of the applicant.
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In order to requalify for exempt status, all applicants except nonprofit cemeteries and nonprofits receiving the exemption under RCW 84.36.560 must file an annual renewal declaration on or before March 31st each year. The renewal declaration must be on forms prescribed by the department of revenue and must contain a statement certifying the exempt status of the real or personal property owned by the exempt organization. This renewal declaration may be submitted electronically in a format provided or approved by the department. Information may also be required with the renewal declaration to assist the department in determining whether the property tax exemption should continue.
In order to requalify for exempt status, nonprofits receiving the exemption under RCW 84.36.560 must file a renewal declaration on or before March 31st of every third year following initial qualification for the exemption. Except for the annual renewal requirement, all other requirements of (a) of this subsection apply.
When an organization acquires real property qualified for exemption or converts real property to exempt status, the organization must file an initial application for the property within sixty days following the acquisition or conversion in accordance with all applicable provisions of subsection (1) of this section. If the application is filed after the expiration of the sixty-day period, a late filing penalty is imposed under RCW 84.36.825.
When organizations acquire real property qualified for exemption or convert real property to an exempt use, the property, upon approval of the application for exemption, is entitled to a property tax exemption for property taxes due and payable the following year. If the owner has paid taxes for the year following the year the property qualified for exemption, the owner is entitled to a refund of the amount paid on the property so acquired or converted.
The department must share approved initial applications for the tax preference provided in RCW 84.36.049 with the joint legislative audit and review committee, upon request by the committee, in order for the committee to complete its review of the tax preference provided in RCW 84.36.049.
This act applies to taxes levied for collection in 2027 and thereafter.
RCW 82.32.805 and 82.32.808 do not apply to this act.
Section 1 of this act expires January 1, 2033.
Section 2 of this act takes effect January 1, 2033.
Section 4 of this act expires January 1, 2033.
Section 5 of this act takes effect January 1, 2033.