Property Tax Exemptions for Non-Profit Organizations

Property Tax Exemptions for Non-Profit Organizations


Properties owned by non-profit organizations, including land trusts, may be exempt from
property taxes provided the properties meet certain requirements specified in state statutes.

The process for applying for property tax exemption is as follows:

1) Determine if your organization is eligible for tax exempt status by reviewing the statute.
2) Complete the Property Tax Exemption Request form and mail to your assessor with all
required documentation materials. Deadline is March 1 of each year.
3) Assessor grants or denies request, or may require additional information in making their
determination.
4) If the assessor denies your application, you must pay any assessed taxes and then sue for
a refund in order to challenge their determination.
5) After being granted exemption, you must file a report with the Department of Revenue on
the exempt property in each even-numbered year.


Attachments

1. Excerpt from Summary of Tax Exemption Devices, WI Dept. of Revenue, February
2003……………………………………………………...………………………………..1

2. Sec. 70.11, Wis. Stats. Regarding requirements for property tax exemption for properties
owned by non-profit organizations………………………………………………………..4

3. Property Tax Exemption Request Form…………………………………………………..5

4. Property Tax Exemption Report Forms…………………………………………………...9

5. Quarles & Brady Tax-Exempt Organizations Law Update: Recent Wisconsin Property
Tax Developments: Claiming Exemptions and Contesting Denials. January 1999…….13

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Summary of Tax Exemption Devices
Wisconsin Department of Revenue biennial report,
71
February 2003
PROPERTY TAX
Many owners of exempt real property are required to report its estimated fair market value as of January 1 of
each even-numbered year. The Department of Revenue (DOR) is required to tabulate the data filed by owners
and estimate the total value of tax exempt real property by category of owner for inclusion in this publication.
Exceptions from the reporting requirement are pollution treatment plant and abatement equipment,
manufacturing machinery and equipment, crops, manure storage facilities, secondary containment structures,
certain housing authority property, cemeteries, and archaeological sites. In addition, legislation enacted in
1996 repealed the reporting requirement for the state, municipalities, school districts, and certain special
purpose districts. Also, the value of federal property is not reported. Thus, the report focuses on exempt
private real property.
Property Tax Exemption Value Data
The "Taxation District Exemption Summary Report" on page 74 summarizes data for the municipalities that
filed Taxation District Exemption Summary Reports with DOR by August 1, 2002. Of the total of 1,900 taxation
districts, 370 had not filed as of that date.
To develop total values for each purpose of property, the number of parcels in each value cell for that purpose
is multiplied by the midpoint of the range of values for that cell, and the results summed. Thus, for the "place
of worship" classification, the 234 parcels in the $1 to $10,000 range multiplied by $5,000 is added to the 1,120
parcels in the $10,001 to $100,000 range multiplied by $55,000, and so on for each value category and each
purpose of property classification. Based on this aggregation, the value of the 18,220 exempt parcels in the
summary report is $16 billion.
An adjustment was made for the 370 municipalities which had not filed as follows. First, the total taxable value
of the towns among the 370 non-filers was determined. This value was multiplied by 2.3%, which is the
percent of total taxable property reported by the filing towns to be exempt. Similar computations were made
for the villages and cities among the 370 non-filers. The average exemption rate for villages was 5.4%; for
cities it was 9.2%. Based on this approach, the value of exempt real property in the 370 non-filing
municipalities was estimated to be $2.6 billion which, when added to the $16 billion for the municipalities that
filed, produced a total of $18.6 billion.
Table 1 shows the percentage of total exempt property by purpose for 2002, and the estimated value of that
property. The percentages, which are based on the reports filed by taxation districts, are used to allocate the
estimated $18.6 billion in exempt property by purpose.
The table shows that, of the estimated $18.6 billion of exempt private property, "place of worship" is the largest
category with about 33% of the total, or $6,159 million. "Non-profit hospitals" is the second largest category
with 11.7% or about $2,172 million. "Public benefit" is the third largest category with 10% or $1,849 million in
exempt property. This category includes the properties of YMCAs, YWCAs, Scouts, Boys’ Clubs, and many
other minor categories of exempt property. "Educational, K-12" and "Private Colleges" comprise 8.2% and
8.3% respectively of exempt property, equal to a combined $3,085 million.

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Property Tax
72
TABLE 1
ESTIMATED VALUE OF EXEMPT PRIVATE REAL PROPERTY, 2002
Exempt Value
Purpose of Property
Percent of Total
($ millions)
CHURCH/RELIGIOUS:
Place of Worship
33.1 %
$6,159
Church–-Other
5.0%
$932
SUBTOTAL CHURCH/RELIGIOUS
38.1%
$7,091
HOUSING:
Nursing Home, incl. religious
5.3%
$993
Retirement Home, incl. religious
4.3%
$790
Housing–-Other
4.6%
$862
SUBTOTAL HOUSING
14.2%
$2,645
EDUCATIONAL, INCL. RELIGIOUS:
Grades K-12
8.2%
$1,528
Private College
8.3%
$1,557
Other–-Educational
3.4%
$628
SUBTOTAL EDUCATIONAL
19.9%
$3,713
MEDICAL FACILITY:
Non-profit Hospital, incl. religious
11.7%
$2,172
Medical Research Foundation
.4%
$73
Medical–-Other
1.1%
$196
SUBTOTAL MEDICAL FACILITY
13.2%
$2,441
PUBLIC BENEFIT
10.2%
$1,849
OTHER
4.6%
$847
TOTAL
100.0%
$18,586
Note: Columns may not sum to totals due to rounding.
Effect of Exempt Property on Tax Rates
It is often argued that property tax rates can be reduced by repealing exemptions. Table 2 explores this
hypothesis. The table shows the actual 2001 average net property tax rates for towns, villages, cities, and
statewide, as well as tax rates calculated under the assumption that the estimated $18.6 billion of exempt
private real property reported in Table 1 is added to the tax rolls. The analysis assumes that there would be no
change in the overall level of state and federal aids and no change in total property tax levies.
Table 2 indicates that, if the reported exempt private real property had been placed on the tax roll in 2001, the
statewide average net property tax rate would have declined by 5.6% from $21.03 to $19.86 per $1,000 of
value. Under this scenario, total net tax rates in cities, villages, and towns would have been lower by 8.4%,
5.1%, and 2.2%, respectively.
The larger impact in cities and villages reflects the fact that exempt public property—schools, hospitals, public
housing—is more likely to be located in urban municipalities than in rural areas. As noted earlier, exempt
private real property averages 9.3% of the value of total taxable property in cities, 5.4% in villages, and 2.3% in
towns.

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Property Tax
73
TABLE 2
AVERAGE NET TAX RATES FOR 2001, COLLECTED IN 2002 ($ PER $1,000 VALUE)
Rate If Exempt Private
Real Property Was
For Property In:
Actual Rate
Taxable
Percentage Change
Cities
$23.84
$21.85
-8.4%
Villages
$21.70
$20.59
-5.1%
Towns
$17.34
$16.96
-2.2%
Statewide Average
$21.03
$19.86
-5.6%
Evaluation
A number of limitations to the estimates presented should be noted. First, the reported data are incomplete
because reports from 370 taxation districts had not been received by the time the report was prepared, and the
value of exempt property in these districts had to be estimated.1 Also, the value of exempt machinery and
equipment, inventories, computers and pollution treatment plant and abatement equipment.2 In addition, the
value of exempt federal, state, and local government property is not included in this report.
Second, there may be systematic underestimation of exempt property values reported for at least two reasons:
(a) a lack of knowledge of the value of often highly-specialized property, which has not been on the market in
many years and which is not likely to be offered for sale in the foreseeable future, and (b) a desire to minimize
the perceived benefit of the tax exemption for political reasons. However, the data were not audited and,
therefore, underestimation cannot be confirmed.
Due to the limitations of these data, care should be taken in using them to represent exempt property values.
Care should also be taken in comparing these data to prior years’ reports due to the changes in 1996 in
reporting requirements and reporting forms.

1 The 370 municipalities were comprised of 285 towns, 65 villages and 20 cities.
2 It is estimated that approximately $12.5 billion of machinery and equipment, $100 million in waste treatment
property, and $74 million in computer equipment are currently exempt from tax. No estimates are available
regarding the value of exempt inventory.

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Property Tax
74

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Wisconsin statute regarding requirements for property tax exemption for properties owned by non-
profit organizations:

70.11 Property exempted from taxation. The property
described in this section is exempted from general property taxes
if the property is exempt under sub. (1), (2), (18), (21), (27) or
(30); if it was exempt for the previous year and its use, occupancy
or ownership did not change in a way that makes it taxable; if the
property was taxable for the previous year, the use, occupancy or
ownership of the property changed in a way that makes it exempt
and its owner, on or before March 1, files with the assessor of the
taxation district where the property is located a form that the
department of revenue prescribes or if the property did not exist
in the previous year and its owner, on or before March 1, files with
the assessor of the taxation district where the property is located
a form that the department of revenue prescribes. Leasing a part
of the property described in this section does not render it taxable
if the lessor uses all of the leasehold income for maintenance of
the leased property, construction debt retirement of the leased
property or both and if the lessee would be exempt from taxation
under this chapter if it owned the property. Any lessor who claims
that leased property is exempt from taxation under this chapter
shall, upon request by the tax assessor, provide records relating to
the lessor’s use of the income from the leased property. Property
exempted from general property taxes is:

(20) PROPERTY HELD IN TRUST IN PUBLIC INTEREST. Property
that is owned by, or held in trust for, a nonprofit organization, if
all of the following requirements are fulfilled:
(a) The property is used to preserve native wild plant or native
wild animal life, Indian mounds or other works of ancient persons
or geological or geographical formations of scientific interest.
(b) The property is open to the public subject to reasonable
restrictions.
(c) No pecuniary profit accrues to any owner or member of the
organization or to any associate of any such owner or member
from the use or holding of the property.
(d) The county board of the county where the property is
located has not determined that the property is not owned by, or
held in trust for, a nonprofit organization and has not determined
that at least one of the requirements under pars. (a) to (c) has not
been fulfilled.

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Notice:
The Form PR-230 – Property Tax Exemption Request –
is published on this site for use of individuals or groups
wanting to apply for an exemption from the property tax.
The form can also be received from your local assessor.
The form must be filed with the municipal assessor in the
jurisdiction where the property is located.
Do NOT file with the Department of Revenue.
If you send the form to the Department of Revenue, we
will have to return it to you for proper filing. This will
cause a delay in processing and may result in your loss of
exemption.

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STATE OF WISCONSIN
PROPERTY TAX EXEMPTION REQUEST
Wisconsin Statutes require completion of this form—in its entirety—to be eligible for exemption from the Wisconsin
property tax. Failure to do so may result in denial of exemption. The completed form and any attachments must be filed
with the assessor of the taxation district in which the property is located by March 1 to be eligible for exemption for the
current assessment year. Refer to Stat, Sec. 70.11 and the Wisconsin Property Assessment Manual for additional information
regarding property tax exemption.
SECTION 1 – APPLICANT INFORMATION

1. Applicant Name:
Date:

2. Applicant is
Sole Proprietorship
WI Chapter 181 Corporation
WI Unincorporated Nonprofit Association
Other (please explain):

3. Contact Person:
4. Registered Agent:
Address:
Address:
Telephone Number(s):
Telephone number(s):
Relationship to Applicant:

5. Mailing address and phone number of Applicant if different than Contact Person:

6. Identify each organizational officer, the officer’s address, the telephone number and the position held within the requesting
organization. Use the space provided on page 4 or attach additional pages as necessary.

7. Please identify the use of
Educational
Religious
Benevolent
the property:
Women’s Club
Historical Society
Fraternity
Library
Rehabilitation
Hospital
Agricultural Fair
Fire Company
Military
Memorial
YMCA/YWCA
Lions Camp
Bible Camp
Charity
Cemetery
Archaeological Site
Art Gallery
Labor Temple
Farmer’s Temple
Housing
Disability Camps
Medical Research
Held for Public Interest
Waste Treatment
Radio Station
Theater
Industrial Development Agencies
Humane Society
Youth Hockey
Sports/Entertainment
Railroad Historic Society
Dependent & Development Disability
Mental/Physical Disabled Camp
Historic/Architectural
Professional Sport/Entertainment Stadium
Local Exposition
Other (please explain):

8. State the organization’s purpose, mission, and primary goal:

9. Describe the services provided by the organization:

10. List the primary beneficiaries of the services:

11. Is there a fee charged, or revenue earned, for services provided?
Yes
No
If Yes, what is the amount of the fee charged or revenue earned?

12. Do you provide any free service? If Yes, explain:
Yes
No
PR-230 (R. 11-01)
1
Wisconsin Department of Revenue

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13. What percent of recipients receive free service (on an annual basis)?
_______ %

14. Do you provide service to anyone at below market or reduced rates?
Yes
No
If Yes, explain:

15. What percentage of annual recipients receive services at below or reduced rates?
_______ %

16. Are you under any obligation to provide services to those who cannot pay?
Yes
No
If Yes, explain:

17. Does Applicant receive any subsidies, grants, or low or no interest loans to operate
Yes
No
or otherwise provide its services? If Yes, identify sources and amounts and how monies are applied or used.

18. How much of Applicant’s annual gross income or revenue is derived from donations?
$ ___________
What percentage is that of Applicant’s total annual income or revenue?
_______ %
SECTION 2 – SUBJECT PROPERTY INFORMATION

19. Property for which exemption is being applied (“Subject Property”):
Address:
Tax parcel number: Number of acres:
Legal description:

20. Estimated fair market value of Subject Property:
$ ___________
If based on an independent appraisal, identify the appraiser and the purpose of the appraisal below.
Appraiser:
as of / /
Purpose of Appraisal:

21. Owner of Subject Property:
If Owner is different from Applicant, explain and identify the relationship between Applicant and Owner.

22. Date Owner acquired Subject Property:
/ /

23. Person or entity from whom Owner acquired Subject Property:

24. Date Owner first began using and occupying Subject Property:
/ /

25. Date Applicant first began using and occupying the Subject Property:
/ /

26. Explain precisely how Applicant actually uses the Subject Property:

27. Explain in detail why Applicant feels the Subject Property qualifies for property tax exemption. Identify the precise statutory
reference and the statutory language supporting the exemption. Finally, describe precisely how applicant and the Subject
Property fit within that statutory language.
SECTION 3 – TENANT INFORMATION

28. Identify all persons and entities other than Owner who have the right to use and occupy any part of the Subject Property.
Include all tenants, licensees, and concessionaires of the Subject Property. Use the space provided on page 4 or attach
additional pages as necessary. For each, include:
a. Name of tenant or occupant.
b. Their mailing address and phone number.
c.
Their interest in the Subject Property.
d. A precise and detailed explanation of how they actually use the Subject Property.
e. The date from which they began occupancy of the Subject Property.
f.
The monthly rate or fee they pay to use or occupy the Subject Property.
g. An explanation of how rent or other fees they pay to use and occupy the Subject Property are used and applied.
h. The portion of the Subject Property they use or occupy.
Indicate number of users other than owner, if there are no other users, enter “None”. Number of other users: _____________

29. Identify the percentage of the Subject Property that is used or occupied by persons other than owner.
______ %

30. Was the Subject Property used in an unrelated trade or business for which the Owner was subject to
Yes
No
taxation under section 511 to 515 of the Internal Revenue Code? If Yes, explain:
2

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SECTION 4 – ATTACHMENTS
31.
ATTACH COPIES OF THE FOLLOWING DOCUMENTS:
A. Documents regarding applicant, owner, tenant(s), or occupant(s) of the Subject Property (where applicable):
1. Proof of non-profit status (e.g. Determination Letter under I.R.C. 501 (c) (3)).
2. Partnership Agreement, Association Documents, Articles of Incorporation, Charter and By-laws, including any
amendments thereto.
3. Latest annual report filed with State Department of Financial Institutions.
4. Curriculum of educational courses offered.
5. Part II of Form 1023 (Application for Recognition of Exemption) filed with the Internal Revenue Service.
6. Form 990 (Return of Organization Exempt from Income Tax).
7. Form 990T (Exempt Organization Business Income Tax Return).
8. Ordination papers for the occupants if the Subject Property is to be considered eligible as housing for pastors and
their ordained assistants, members of religious order and communities, or ordained teachers.
9. Leases and subleases affecting the Subject Property or any part thereof, including all amendments thereto.
10. Concessionaire agreements, license agreements, and other documents regarding the use or occupancy of the
Subject Property or any part thereof, including all amendments thereto.
11. Covenants, restrictions, rules and regulations (recorded or unrecorded), and all amendments thereto, affecting use
or occupancy of the Subject Property or title thereto and all amendments thereto.
12. Mortgages (recorded or unrecorded) affecting the Subject Property.
13. Copy of the documents listed in 1 through 12 above as the same relate to any tenant or occupant of the property.
14. Any other information that would aid in determining exempt status.
B. Documents regarding the Subject Property:
1. Survey of the Subject Property. This includes certified survey maps and subdivision maps and plats.
2. An Appraisal of the Subject Property.
3. Deeds or instruments of conveyance by which organization acquired interest in the Subject Property.
4. Any other information that would aid in determining exempt status.
SECTION 5 – AFFIDAVIT
Under penalties of perjury, I, on behalf of the above-named organization/Applicant, hereby certify that I am authorized to
sign and submit this application, and that the information and documents submitted herewith are true and correct to the
best of my knowledge and belief.
Signature
Name (printed)
Title
Date
Phone
STATE OF WISCONSIN )
COUNTY OF )
Subscribed and sworn to before me this _____ day of ________________________________, ___________
________________________________________
Notary Public
My Commission expires on __________________
(Seal)
3

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