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Rankin County denies Salvation Army tax-exemption request for disaster warehouse, citing majority-for-profit use
Summary
County attorney told the board a five-part charitable-use test failed because Salvation Army planned to rent 65% of a warehouse at market rates; the board voted to deny the request.
The Rankin County Board of Supervisors on June 2 denied a request from the Salvation Army for a blanket ad valorem tax exemption for an emergency disaster services warehouse at 1350 Plywood Drive, after county legal staff said the organization planned to rent 65% of the building at market rates.
County legal counsel reviewed the county’s five-part test for evaluating charitable-use exemptions and told the board that, while the Salvation Army is a recognized 501(c)(3) charitable organization, the proposed use did not satisfy several elements of the local exemption test. The attorney said the county evaluates whether (1) the activity advances a charitable purpose, (2) a substantial portion of services are rendered gratuitously, (3) the activity benefits a substantial class of persons in need, (4) it relieves government burden, and (5) the activity is free from a private profit motive. He said the rental of a majority of the space at market rent raised questions under elements 1, 2, 3 and 5.
“It’s my opinion that at least the elements 1, 2, 3 and 5 would fail in this case,” the county attorney said during the meeting. He recommended the board deny the request and authorize the county attorney to communicate the denial to the Salvation Army.
Supervisors debated whether the county could grant a partial exemption; staff told the board state law does not allow the county to grant a partial exemption for the parcel as filed. One supervisor asked whether Salvation Army could demonstrate that rental proceeds would flow back to charitable operations; staff said the county’s standard response is that tenants should pay the ad valorem tax impact and the owner may pursue other arrangements for charitable activity.
Supervisor Jay moved to deny the exemption; Supervisor Brad seconded. The motion carried.
The denial applies to the Salvation Army’s request for tax year 2025 and for the personal property PIN listed on the application. The county attorney said the board could reconsider if the applicant returned with evidence that the space would be used substantially below market rent or that the majority of use would be directly charitable and free of private benefit.
