Primarily Charitable OrganizationsWeb Site Available about Comptroller’s Determination Letters
The Texas Comptroller’s office has a way to help taxing authorities locate the number of organizations in their jurisdictions that have qualified as primarily charitable organizations.
Organizations engaged primarily in charitable activities, as defined in the Property Tax Code, may be eligible for a property tax exemption; however, it is up to the local taxing authorities, as provided by Tax Code Section 11.184(b), to decide whether to grant a local option exemption.
Local taxing unit
Individual taxing units may adopt the local option exemption by a vote of its governing body, or by majority vote at an election called by the governing body upon petition by 20 percent of the qualified voters who voted in the taxing unit’s last election.
The taxing unit—by its governing body or citizens—votes to adopt the exemption for all qualified organizations in its jurisdiction. It cannot “pick and choose” among those eligible for the exemption. If, for example, five organizations in a school district are eligible for the exemption, all five of the eligible organizations may receive the school exemption. If these five organizations receive an exemption from school taxes, they are not necessarily exempt from county and city taxes. The county and city must decide whether or not to offer the exemption for the organizations.
Comptroller determination
Before an organization can apply locally for the exemption, the Comptroller’s office must verify that the nonprofit organization is either a statewide or local charitable organization engaged primarily in charitable activities. The Comptroller’s office issues a determination letter stating that the organization is primarily charitable.
Taxing units and property owners may search the Comptroller’s records to find the names of organizations that have successfully applied for a Comptroller’s determination letter and are thus eligible to apply for a local property tax exemption. The Comptroller’s Web address to search for organizations issued property tax determination letters is www.window.state.tx.us/taxinfo/exempt/exmpProp.html.
For more information about applying to the Comptroller’s office for a determination letter, contact the Tax Policy Division’s Exempt Organizations Section, by mail at P.O. Box 13528, Austin, Texas 78711-3528, by calling 1-800-531-5441 or by e-mail at exempt.orgs@cpa.state.tx.us. Find more information at the sections’ Web page.
Organization
If the local taxing unit or units offer the property tax exemption, the organization then must complete the Application for Primarily Charitable Organization Property Tax Exemption (Comptroller Form 50-299), attach the Comptroller’s determination letter and file with the local appraisal district by April 30. The district’s chief appraiser may extend the April 30 deadline for good cause shown for a single period not to exceed 60 days.
A qualified organization is entitled to an exemption for the following property used exclusively for the charitable function listed in Tax Code Section 11.18(d) by the organization or other charitable organizations:
- buildings, including incomplete improvements;
- other real property; and
- tangible personal property.
Incomplete improvements may not be exempted for more than five years.
Use of the exempt property by persons who are not a part of the charitable organization does not result in loss of the exemption if the use is incidental to use by the charitable organization and limited to activities that benefit the charitable organization owning the property.
An organization may qualify, but receive no benefit from the exemption, if it owns no property or the appraisal district determines that the property is not used exclusively for qualifying charitable activities.
An organization is required to obtain a new Comptroller determination letter and reapply with the appraisal district for the exemption every five years.
For property tax questions about this exemption, contact the Property Tax Division’s Technical Assistance Section at 1-800-252-9121. Or, e-mail the staff at ptd.cpa@cpa.state.tx.us.
