MN Nonprofit Property Tax Exemption: Does Your Nonprofit Qualify?

In 2016, Minnesota had approximately 33,977 registered nonprofit organizations. The law requires they adhere to certain restrictions. Like many other corporations, they have financial obligations to the state. However, such charitable groups may be eligible for a variety of state tax exemptions.
The three possibilities are:

  1. Income tax
  2. Sales tax
  3. Property tax

Do you know whether your organization qualifies for the nonprofit property tax exemption?

What to Submit

If you are considering applying for the tax exemption, you will need to provide adequate and proper documentation. You will have to first prove you are a registered and incorporated charity as defined by the state of Minnesota. This means sending the articles of incorporation. In addition, you will have to submit at least the following:

  • Federal IRS 501(c) 3 determination letter
  • Most recent Form 990
  • All financial statements
  • Any Annual fundraising reports

You will submit these to the local assessor who will examine them to see if they meet the following criteria to obtain nonprofit property tax exemption:

  1. Stated Purpose: Is it helpful to others and not material rewarding to the organization?
  2. Financial support: Who and what supports the organization: government grants, individual gifts, private donations, public?
  3. Recipients: Do a considerable number receive services and/or benefits free or at a reduced cost? Alternatively, does the organization by delivering services to the recipients lighten a load otherwise carried by the government? Is the recipient group restricted to a specific type or non-restricted? Do they meet the requirements through their relationship with the nonprofit?
  4. Income: Do donations and/or gifts coming into the organization amount to a profit not given away

These and other more complex issues will be the focus of the assessor. He or she will require all available information in order to ascertain whether your group does meet the standards for receiving this type of property tax exemption. Contact the Office of the Assessor for your county to find out the directions for submission and to request an Application for Property Tax Exemption.

Consult a Nonprofit Property Tax Exemption Specialist

As a non-profit organization, you may be eligible to take advantage of a number of tax exemptions. Yet, before you can apply, you need to prepare the right information for consideration. The complexity concerning the submission of materials for the non-profit property tax exemption and the rate of refusal may be discouraging. You can, however, reduce the overall risk by consulting a lawyer who specializes in handling such cases under Minnesota state law.

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