Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Nonprofit Tax Exemption topic
No spam. Unsubscribe anytime.
Commissioner briefs board on nonprofit tax exemptions; supervisors decline immediate action
Summary
The Commissioner of the Revenue explained that federal 501(c) status does not automatically grant property tax exemption in Virginia; the Board told staff not to pursue blanket exemptions now and asked for comparative research from other localities.
Richard Bradshaw, Commissioner of the Revenue for James City County, briefed the Board on property-tax treatment of nonprofit organizations and the limits of local authority to exempt organizations. After discussion — including questions about donated vehicles and personal property taxation — supervisors declined to enact any local exemptions at the meeting and directed staff to research practices in other localities and return with options.
Bradshaw told the Board that federal 501(c) income-tax status does not confer property-tax exemption at the state or local level. “501(c) status does not carry with it a property tax exemption of any sort,” he said, explaining that property exemptions in Virginia are created either by state classification or by local designation. He said examples of state-level classification include cemeteries, which are exempt from real-estate tax statewide. Local designation, Bradshaw said, requires a showing of substantial local benefit to justify an exemption.
The Board discussed a specific request from a local nonprofit that accepts donated vehicles, refurbishes them and gives them to area residents. Bradshaw explained personal property tax is assessed on titled vehicles on a prorated monthly basis and that James City County also collects a $10 local vehicle license fee regardless of ownership duration. Staff said organizations that typically hold vehicles less than 30 days and then give them away may pay little or no tax; vehicles held beyond the county’s prorating threshold generally incur tax.
Several supervisors voiced concern about setting a precedent that could create an open-ended demand for exemptions and shift tax burdens to other taxpayers. One supervisor noted that the county already supports nonprofits through direct funding and suggested grant or programmatic support may be a better way to assist nonprofits than permanent property tax exemptions. No motions were made to grant an exemption at the meeting.
Board direction: staff was asked to gather comparative information from neighboring localities about how they handle nonprofit property exemptions and to return with that information, and staff said they could bring back the specific case for Board consideration in a future meeting if the Board wished. The Board did not adopt any ordinance or designation at this session.
