A failure to communicate
“Effectively, ownership by a nonprofit organization does not in itself ensure that that property will be exempt,” Joe Galbo III, Crawford County’s chief assessor, told the Tribune Tuesday. “There is a two-step process. The organization must substantiate that it meets the qualifications as an organization for real estate exemption. Then they have to substantiate that the specific property is being used to advance their mission in a way that satisfies the (Pennsylvania state) Legislature and the appellate courts.”
In other words, “If you are an exempt organization and you are purchasing property, it is not automatically exempt,” Galbo said.
In Crawford County, property tax bills from county and local governments, whose fiscal years end Dec. 31, are mailed in the spring. Property tax bills from school districts, whose fiscal years end June 30, are mailed in the early fall.
According to Galbo, real estate tax bills are based on who owns the building on Jan. 1. When private property changes hands, the amount payable by both parties is prorated, he explained, but because the seller in this case, PENNCREST, is a government entity, the property held on to its property tax exemption through the end of the 2012 calendar year.
The deadline for applying for an exemption for 2013 was Sept. 1, 2012.
Once the annual deadline passes, there’s only one option. “You can go to the entities and ask for exoneration — approach them and ask for forgiveness of the particular tax,” Galbo said. “It would be the elected officials of each taxing district who make the decision.”
Galbo stressed that notices are sent to the buyer after the real estate transfer describing the property as having “an active taxable status” and advising that an exemption must be applied for.
“If attorneys are working with buyers, it’s up to them to advise them to do it,” Galbo said, stressing that all exempt organizations should talk to their attorneys or other legal advisors about their organization’s specific needs and what needs to be done to apply for an exemption.
“Outside of government, there is no such thing as presumed exemption,” Galbo added. “The burden is on the entities applying for an exemption to demonstrate that they are exempt.”
Mary Spicer can be reached at 724-6370 or by email at firstname.lastname@example.org.