Laws, Regulations & Annotations

Property Taxes Law Guide – Revision 2017

Revenue and Taxation Code

Property Taxation

Part 2. Assessment

CHAPTER 1. Taxation Base

Article 1. Taxable and Exempt Property

Section 202

202. Crops, libraries, museums, schools, government property. (a) The exemption of the following property is as specified in subdivisions (a), (b), (d) and (h) of Section 3 of Article XIII of the Constitution, except as otherwise provided in subdivision (a) of Section 11 thereof:

(1) Growing crops.

(2) Property used for free public libraries and free museums.

(3) Property used exclusively for public schools, community colleges, state colleges, and state universities, including the University of California.

(4) Property belonging to this state, a county, or a city. Property belonging to the State Compensation Insurance Fund is not property belonging to this state.

(b) The exemption described in paragraph (3) of subdivision (a) shall apply to off-campus facilities owned or leased by an apprenticeship program sponsor, if such facilities are used exclusively by the public schools for classes of related and supplemental instruction for apprentices or trainees which are conducted by the public schools under Chapter 4 (commencing with Section 3070) of Division 3 of the Labor Code.

(c) Without prejudice to the right to assert an exemption otherwise available under subdivision (a), (d), or (e) of Section 3 of Article XIII of the Constitution, a property tax under this division shall be imposed upon that portion of the bookstore property determined to be generating the unrelated business taxable income, as defined in Section 512 of the Internal Revenue Code, to the extent property is:

(1) Owned by an educational institution of collegiate grade or used by a nonprofit corporation operating a student bookstore affiliated with such an educational institution, and

(2) Is primarily devoted to bookstore use that produces income that is taxable as unrelated business taxable income.

This tax shall be determined by establishing a ratio of the unrelated business taxable income to the bookstore's gross income as defined by the Internal Revenue Code. That percent shall be the maximum percentage of such bookstore property on which a property tax can be levied.

At the end of a fiscal year when unrelated business income has been generated, the nonprofit organization shall file with the assessor copies of the organization's most recent tax return filed with the Internal Revenue Service.

History.—Stats. 1945, p. 31, (Third Extra Session 1944), deleted "United States" from subsection (d) and added subsection (e). Pursuant to Section 4 of the amending statute this amendment took effect on the adoption of the 1944 amendment to Article XIII, Section 1, of the Constitution. Stats. 1951, p. 2447, in effect September 22, 1951, added second sentence to subsection (d). Stats. 1974, Ch. 311, p. 590, in effect January 1, 1975, substituted "subsections (a), (b), (d) and (h) of Section 3" for "Section 1", and added the balance of the first sentence after "Constitution"; and deleted former subsection (e) relating to property exempt under the laws of the United States. Stats. 1976, Ch. 776, p. 1817, in effect January 1, 1977, added the subdivision letters; relettered the former subsections (a), (b), (c), and (d) as subsections (1), (2), (3), and (4), respectively; and added subdivision (b). Stats. 1978, Ch. 936, in effect September 20, 1978, added the phrase "community colleges, state colleges, and state universities, including the University of California" in subdivision (a)(3). Sec. 4 of the bill provided that no reimbursement was to be allowed local government because of this amendment. Stats. 1988, Ch. 1606, in effect January 1, 1989, added subdivision (c).

Note.—Stats. 1951, p. 2447, amending Sections 202, 12003 and 12264 of the Revenue and Taxation Code, provides that if any one of its provisions is held invalid the remainder of the act shall also be deemed invalid.

Note.—Section 3 of Stats. 1976, Ch. 776, p. 1817, provided that 1976 amendments are declaratory of existing law.

Note.—Section 4 of Stats. 1988, Ch. 1606, provided that if any provision of this act or the application thereof to any person or circumstances is held invalid, that invalidity shall not affect other provisions or applications of the act which can be given effect without the invalid provision or application, and to this end the provisions of this act are severable. Sec. 5 thereof provided that no reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the Legislature finds and declares that there are savings as well as costs in this act which, in the aggregate, do not result in additional net costs. Sec. 6 thereof provided that notwithstanding Section 2229, the requirements of that section shall not apply to the exemption of property for purposes of ad valorem property taxation made by this act. In addition, no appropriation is made by this act and the state shall not reimburse any local agency for any property tax revenues lost by it pursuant to this act. Sec. 7 thereof provided that this act shall apply to property taxes levied for the 1989–90 fiscal year and fiscal years thereafter.

Note.—For cases relating to the exemptions in this section see annotations after Article XIII, Section 3, of the Constitution.