Some leaders of Exempt Organizations assume that once the entity is granted an exemption for from taxes, such as a 501(c)(3) exemption for a charity, that the organization will pay no tax. However, such an exemption is only for federal income tax. Other taxes, such as state and local sales tax, property tax, or other taxes may still be applicable. To add to the complexity, the rules vary by state and may have additional complexities, such as rules around use of the property or applications for exemption.
An organization must consider the rules in each place in which property it own is located (and sometimes where it travels, if the property is mobile). Tennessee is a state that requires that an exempt organization apply for exemption from property taxes, and the exemption may only apply going forward after the application is accepted. If you need assistance sorting this out for your organization, the Crosslin Tax Team will be glad to help. Give us a call at (615) 320-5500 or e-mail your tax team member.
