Laws, Regulations & Annotations

Property Taxes Law Guide – Revision 2014
 

Revenue and Taxation Code

Property Taxation

Part 2. Assessment

CHAPTER 1. Taxation Base

Article 1. Taxable and Exempt Property

Section 214.8

214.8. Welfare exemption; limitation. (a) Except as provided in Sections 213.7 and 231, and as provided in subdivision (g) of Section 214 with respect to veterans' organizations, the "welfare exemption" shall not be granted to any organization unless it is qualified as an exempt organization under either Section 23701d of this code or Section 501(c)(3) of the Internal Revenue Code. This section shall not be construed to enlarge the "welfare exemption" to apply to organizations qualified under Section 501(c)(3) of the Internal Revenue Code of 1954 but not otherwise qualified for the "welfare exemption" under other provisions of this code.

The exemption for veterans' organizations shall not be granted to any organization unless it is qualified as an exempt organization under either Section 23701f or 23701w of this code or under Section 501(c)(4) or 501(c)(19) of the Internal Revenue Code. This section shall not be construed to enlarge the "veterans' organization exemption" to apply to organizations qualified under Section 501(c)(4) or 501(c)(19) of the Internal Revenue Code but not otherwise qualified for the "veterans' organization exemption" under other provisions of this code.

(b) For purposes of subdivision (a), an organization shall not be deemed to be qualified as an exempt organization unless the organization files with the assessor a valid organizational clearance certificate issued pursuant to Section 254.6.

(c) (1) For purposes of subdivision (a), a limited liability company wholly owned by one or more qualifying organizations, which may include governmental entities and nonprofit organizations, that are exempt under Section 23701d or under Section 501(c)(3) of the Internal Revenue Code shall qualify as an exempt organization.

(2) In the case of a limited liability company that does not have a valid unrevoked letter from the Franchise Tax Board or the Internal Revenue Service, the limited liability company may not be deemed to be qualified as an exempt organization unless each nonprofit tax-exempt member of the limited liability company files with the board a copy of a valid, unrevoked letter or ruling from either the Franchise Tax Board or the Internal Revenue Service that states that the organization qualifies as an exempt organization under the appropriate provisions of the Revenue and Taxation Code or the Internal Revenue Code.

(d) The amendments made by the act adding this subdivision shall apply with respect to lien dates occurring on and after January 1, 2005.

History.—Added by Stats. 1973, Ch. 5, p. 5, in effect February 28, 1973, operative March 1, 1973. Sec. 5 thereof provided no payment by state to local governments because of this act. Stats. 1977, Ch. 246, in effect January 1, 1978, substituted "Sections" for "Section" in the first paragraph and added "or 501(c)(19)" in the second paragraph. Stats. 1986, Ch. 1457, effective January 1, 1987, added the subdivision letters; substituted "unless it is" for "which is not" after "organization" and added "either" after "under" in the first sentence of the first paragraph and in the first sentence of the second paragraph of subdivision (a); and added subdivision (b). Stats. 1990, Ch. 126, in effect June 11, 1990, deleted "of 1954" after "Internal Revenue Code" in the first sentence of the first paragraph and in the first sentence of the second paragraph of subdivision (a). Stats. 1992, Ch. 807, in effect January 1, 1993, added "as provided in . . . veterans' organizations," after "and 231" in the first sentence of subdivision (a). Stats. 1995, Ch. 497, in effect January 1, 1996, added "or 23701w" after "Section 23701f" in the first sentence of the second paragraph of subdivision (a). Stats. 2003, Ch. 471 (SB 1062), in effect January 1, 2004, added "of the Internal Revenue Code" after "501(c)(19)" in the second sentence of the second paragraph of subdivision (a) and substituted "a valid organizational clearance certificate issued pursuant to Section 254.6" for "duplicate copies of a valid, unrevoked letter or ruling from either the Franchise Tax Board or, in the alternative, the Internal Revenue Service, which states that the organization qualifies as an exempt organization under the appropriate provisions of the Bank and Corporation Tax Law or the Internal Revenue Code" after "with the assessor" in the first sentence of subdivision (b). Stats. 2004, Ch. 354 (AB 3073), in effect August 30, 2004, added subdivision (c) and (d). Stats. 2006, Ch. 224 (SB 1607), in effect January 1, 2007, added ", which may include governmental entities and nonprofit organizations," after "more qualifying organizations" in the first sentence of paragraph (1) and added "nonprofit tax-exempt" after "organization unless each" in the first sentence of paragraph (2) of subdivision (c).

Construction.—An organization which is unable to satisfy the "exclusively charitable" requirements of both section 23701(d) of the Revenue and Taxation Code and section 501(c)(3) of the Internal Revenue Code is barred from the benefits of the welfare exemption by the express terms of this section City of Los Angeles v. Los Angeles County, 19 Cal.App.3d 968.