Exemptions

The following is provided as a resource to list types of property tax exemptions and general qualifying factors of each exemption; however, it is not possible to address all the unique situations that may arise in determining eligibility.

Please note that exemptions from property taxation are exemption from ad valorem taxation; they do not apply to direct levies or special taxes. For example, annual tax bills may include other items such as special assessments, special taxes, direct levies, delinquent county utility billings, weed and hazard abatement charges, and Mello-Roos Bonds. None of these items are defined as property taxes under the law because they are not based upon the assessed value of the property. Exemption only applies to ad valorem taxes.


AIRCRAFT OF HISTORICAL SIGNIFICANCE

This exemption provides a property tax exemption for "Aircraft of Historical Significance." For property tax purposes, "Aircraft of Historical Significance" means any aircraft which is an original, restored, or replica of a heavier than air powered aircraft which is 35 years or older or any aircraft of a type or model of which there are fewer than five in number known to exist worldwide. (See Revenue and Taxation Code section 220.5.)

The exemption only applies if all of the following conditions are met:

  1. The assessee is an individual owner who does not hold the aircraft primarily for purposes of sale.
  2. The assessee does not use the aircraft for commercial purposes or general transportation.
  3. The aircraft is available, for display to the public at least 12 days during the 12-month period immediately preceding the lien date (January 1) for the year for which the exemption is claimed. If the aircraft was first made available for public display less than 12 days prior to the lien date, the exemption may be granted if the claimant certifies in writing that the aircraft will be made available for public display at least 12 days during the 12-month period commencing with the first day the property was made available for public display.

An individual owner as referenced in (1) above is a live person, not a legal entity such as a corporation or partnership.

To apply for the Aircraft of Historical Significance Exemption, a claim form must be filed each year with the assessor of the county where the aircraft is located. The claim form, BOE-260-B, Claim for Exemption from Property Taxes of Aircraft of Historical Significance, is available from the county assessor.

The claim must be filed annually with the assessor by 5:00 p.m., February 15, for the preceding January 1 lien date to receive 100 percent of the exemption. The claimant must attach to the claim form a certificate of attendance from the event coordinator of the event at which the aircraft was displayed.

A fee of $35 is charged and collected by the assessor with the initial application for an exemption. An annual affidavit is required for exemption but the $35 fee is only required with the initial application in any given county.

The following links provide additional information on Aircraft of Historical Significance.

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AIRCRAFT FOR DISPLAY

This exemption provides a property tax exemption for aircraft that is made available for display in an aerospace museum (see Revenue and Taxation Code section 217.1). One of the primary requirements to qualify for the exemption is that the aircraft must have been available for public display in an aerospace museum for 90 days or more during the 12-month period that immediately preceded the lien date for the year that the exemption is claimed (section 217.1, subdivision (e)). Unlike most exemptions, the aircraft for display exemption is not based on its status as of lien date, but based on this display status.

The aerospace museum that the aircraft is displayed must be one that is either publicly owned or one that is operated by a nonprofit organization that qualifies for exemption under section 23701d and regularly open to the public. Regularly open to the public means that the aerospace museum was open to the public for 20 or more hours per week for 35 or more weeks during the 12-month period that immediately preceded the lien date for the year for which the exemption is claimed. If the museum has been open for less than 35 weeks or for less than 20 hours per week during the required time period, the exemption may still be granted if the director or other officer of the museum certifies in writing that the museum will be open for not less than 20 hours per week for not less than 35 weeks during the 12-month period beginning with the date the aerospace museum was first opened

In addition, such personal property must meet the at least one of following criteria:

  1. The aircraft has been restored or maintained, whether currently certified or not for flight purposes.
  2. The aircraft is donated in perpetuity to the aerospace museum.

This exemption does not apply to any aircraft loaned to the aerospace museum by any person who holds aircraft primarily for purposes of sale.

To apply for the Available for Display Exemption, a claim form must be filed annually with the assessor of the county where the aircraft is located by 5:00 p.m., February 15, for the preceding January 1 lien date (the exemption is waived if the claimant fails to file by February 15). The claim form, BOE-260-A, Certificate and Affidavit for Exemption of Certain Aircraft, is available from the county assessor.

The claimant may complete the affidavit for exemption for multiple aircraft in the same aerospace museum, listing the following information for each one on an attachment:

  • the description of the aircraft (make, model, year, FAA or tail number)
  • the nature of the aircraft for which the exemption is claimed (restored or maintained aircraft and/or aircraft donated in perpetuity)

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CEMETERY

The Cemetery Exemption is available to property used or held for the permanent deposit of human dead, or for the care and maintenance of the property or the dead, except when used or held for profit. The purpose of the Cemetery Exemption is to protect the final resting place of the human dead.

Health and Safety Code section 7003 defines "cemetery" as either of the following:

  • Any of the following that is used or intended to be used and dedicated for cemetery purposes:
    1. A burial park, for earth interments.
    2. A mausoleum, for crypt or vault interments.
    3. A crematory and columbarium, for cinerary interments.
  • A place where six or more human bodies are buried.

A property that is discovered to have six or more human bodies buried on it is not eligible for the exemption unless it is exclusively used for cemetery purposes as described in Property Tax Rule 132.

Property Tax Rule 132 provides that for purposes of the Cemetery Exemption "property used or held for the permanent deposit of human dead or for the care and maintenance of the property or the dead" shall mean:

  1. Property in actual use or prepared, made available, sold or offered for sale or use for burial or other permanent deposit of the human dead;
  2. Property whose use is incidental to such burial purposes;
  3. Passively held property that qualifies for exemption
  4. (Passively held land may be defined as land that is held but not presently developed for burial purposes. Property Tax Rule 132 allows exemption on passive holding of large sections of land for future cemetery use by an established cemetery under certain conditions.)

In most cases, to receive the Cemetery Exemption, a claim form must be filed. To apply for the Cemetery Exemption, a claim form must be filed each year with the assessor of the county where the cemetery is located. The claim form, BOE-265, 20__ Cemetery Exemption, Claim for Exemption from Property Taxes Under Section 3(g) of Article XIII of the Constitution of the State of California and Sections 204 and 256.5 of the Revenue and Taxation Code, is available from the county assessor. The claim for the Cemetery Exemption must be filed annually with the assessor between January 1 lien date and 5:00 p.m. on February 15 to receive the full exemption for that year.

An exception to filing a claim form to receive the exemption involves property that is known as "pioneer cemeteries."

Cemetery Exemption – Pre 1900 (Pioneer Cemeteries)

The need to file a claim to receive the Cemetery Exemption is not required for certain pioneer cemeteries in the unincorporated area of a county where the county assessor is unable to identify a legal cemetery authority to file the claim (section 256.7). Both of the following must apply:

  1. The cemetery was used prior to 1900; and
  2. The cemetery is no longer used for current or future interments.

Section 256.7 also allows the cancellation of any taxes, penalties, or interest to address future sales of historic cemeteries for tax default where the property would be eligible for exemption from property tax, except that the annual claim form was not filed.

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CHURCH

The Church Exemption may be claimed on property that is owned, leased, or rented by a religious organization and used exclusively for religious worship services. (See Revenue and Taxation Code section 206.) The Church Exemption is the most restrictive of the three exemptions available to a church since the organization's property must be used solely for religious worship and other activities reasonably necessary for the accomplishment of the church's religious purposes.

To apply for the Church Exemption, a claim form must be filed each year with the assessor of the county where the property is located. If a church owns and uses property and also allows another church to use that property, both churches must file Church Exemption claim forms. In the case of leased property,

  • The church or religious organization leasing the property (lessee) may file a Church Exemption claim form, or
  • The owner/lessor may file a Lessor's Exemption Claim form and have the user/lessee church complete the affidavit stating that the user/lessee church uses the property only for religious worship.

The appropriate forms are available from the county assessor. They are BOE-262-AH, Church Exemption, and BOE-263, Lessor's Exemption Claim (if the property is leased). To receive the full 100 percent exemption for property owned or leased on the January 1 lien date, the claim must be filed by February 15. For example, to receive the exemption for fiscal year 2007-08, which runs from July 1, 2007, through June 30, 2008, the claim must be filed by February 15, 2007.

The following links provide additional information on the Church Exemption.

See also Religious and Welfare Exemptions.

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COLLEGE

Nonprofit educational institutions of collegiate grade may be eligible for exemption from property taxes through either the College Exemption or the Welfare Exemption. (Colleges that are part of the public school system, such as community colleges, state universities, including the University of California, are exempt under public schools.)

College Exemption
In general, buildings, property, whether owned or leased, and used exclusively for educational purposes by a nonprofit educational institution of collegiate grade, is eligible for the College Exemption. A nonprofit educational institution of collegiate grade is an institution incorporated as a nonprofit college or seminary of learning, which requires for regular admission the completion of a four-year high school course or its equivalent, and confers upon its graduates at least one academic or professional degree, based on a course of:

  • At least one year in flight test technology or flight-test science, or
  • At least two years in liberal arts and science, or
  • At lease three years in professional studies, such as law, theology, education, medicine, dentistry, engineering, veterinary medicine, pharmacy, architecture, fine arts, commerce, or journalism. (Revenue and Taxation Code section 203, subd. (b))

To apply for the College Exemption, a claim form must be filed each year with the assessor of the county where the property is located. The claim form, BOE-264-AH, College Exemption, is available from the county assessor. To receive the full 100 percent exemption for property owned or leased on the January 1 lien date, the claim must be filed by February 15.

The following links provide additional information on the College Exemption.

Welfare Exemption

Section 214(e) was added to allow the Welfare Exemption for college properties used by qualifying welfare organizations. Properties owned by educational institutions of collegiate grade, as defined in section 203 (College Exemption) as well as properties owned by qualifying religious, hospital, scientific, or charitable organizations, are eligible for the Welfare Exemption if the property is used exclusively for religious, hospital, scientific, or charitable purposes and activities and if the property and organization(s) meet all of the requirements for the Welfare Exemption. In the case of a college property, section 214(e) provides that a statement of irrevocable dedication to educational purposes in the college's articles is acceptable.

Property owned by a college may qualify for the Welfare Exemption if it is used by

  • a church for religious purposes and activities
  • a hospital for hospital purposes and activities
  • a charitable organization for charitable purposes and activities

However, property owned by a qualifying organization (religious, hospital, scientific or charitable) and used by a college for educational purposes of collegiate grade is ineligible for the Welfare Exemption. Section 214(a) expressly provides that the Welfare Exemption is not to be construed to enlarge the College Exemption.

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EXHIBITION

This exemption provides a property tax exemption for personal property that is brought into the state on a temporary basis for exhibition purposes (see Revenue and Taxation Code section 213). There are no limiting factors as to who may own the property (an individual or an organization, non-profit or for-profit). Owners must file for the exemption if property is located here as of January 1 lien date. Property that is brought in after lien date but is removed prior to the next succeeding lien date does not require an exemption filing.

The exhibition exemption applies only if all of the following conditions are satisfied:

  • The property is brought into this State exclusively for purposes of use or exhibition at any exposition, fair, carnival or public exhibit of literary, scientific, educational, religious or artistic works in this State and is used only for these purposes while in this State.
  • It is intended to remove the property from the State following its use or exhibition here.
  • The property is subject to taxation in some other state or a foreign country while in this State and all taxes due in the other state or country are paid when the exemption is claimed. The assessor may request documentation from the claimant on this requirement.

To apply for the Exhibition Exemption, a claim form must be filed each year with the assessor of the county where the property is located. The claim form, BOE 270-AH, 20__ Exhibition Exemption, is available from the county assessor. The claim must be filed by 5:00 p.m. on February 15, for the preceding January 1 lien date to receive 100 percent of the exemption.

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HOMEOWNERS' EXEMPTION

The California Constitution provides a $7,000 reduction in the taxable value for a qualifying owner-occupied home. The home must have been the principal place of residence of the owner on the lien date, January 1st. To claim the exemption, the homeowner must make a one-time filing of a simple form with the county assessor where the property is located. The claim form, BOE-266, Claim for Homeowners' Property Tax Exemption, is available from the county assessor.

A person filing for the first time on a property may file anytime after the property or claimant becomes eligible, but no later than February 15 to receive the full exemption for that year.

Homeowners' Exemption claimants are responsible for notifying the assessor when they are no longer eligible for the exemption. December 10th is the last day to terminate the Homeowners' Exemption without penalty; the assessor should receive notice of ineligibility by that date.

The following link provides additional information on the Homeowners' Exemption.

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LESSOR'S EXEMPTION

In general, the Lessor's Exemption is available on certain types of leased property, when the exemption of property taxes benefits the lessee institution in the form of rental reduction or a refund. The Lessor's Exemption is available to property that is leased, as of the lien date, January 1, for the following uses (see Revenue and Taxation Code section 202.2):

  • Public libraries that are free and open to the public
  • Museums that are free and open to the public
  • Leased property used exclusively for public schools, community colleges, state colleges, or state universities, including the University of California.
  • Leased property used exclusively for educational purposes by a nonprofit institution of higher education.

Additionally, section 206.2, allows the Lessor's Exemption on property used exclusively for religious worship, including church parking for congregations of 500 or less.

The claimant must annually file a claim form with the county assessor of the county in which the property is located. The lessor, claimant, must provide all information required and answer all questions contained in the claim form, BOE-263, Lessor's Exemption Claim, on an annual basis. A lessee's affidavit attesting, under penalty of perjury, that the property is used exclusively for the qualifying purpose must also be submitted (a sample affidavit is located on the reverse side of the BOE-263 claim form). The claim must be filed between January 1 and February 15 in order to receive 100 percent of the exemption for the following fiscal year.

The following link provides additional information on the Lessor's Exemption.

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LIBRARY

Property used for free public libraries is exempt by the Constitution (Section 3(d) of article XIII of the California Constitution and section 202 of the Revenue and Taxation Code). Libraries that charge admission may qualify for the Welfare Exemption, if their properties are owned and operated by non-profit organizations meeting all the requirements of section 214.

In addition to being free, the library must be open to the general public on a regular basis, and the public must be made aware that such is the case. Thus, there should be a sign on the property indicating the library is open to the general public on a regular, scheduled, ongoing basis. For property tax purposes, regularly open to the public means open to the public not less than 20 hours per week for not less than 35 weeks of the 12-month period immediately preceding the lien date for the year for which the exemption is claimed (see Revenue and Taxation Code sections 217 and 217.1).

The property may be owned or leased, but it must be used as a free public library as of the January 1 lien date. To apply for the Free Public Library Exemption, a claim form must be filed each year with the assessor of the county where the property is located. The claim form, BOE-268-B, Exemption for Property Used by a Free Library or Free Museum, is available from the county assessor (or claim form BOE-263, Lessor's Exemption Claim, if the property is leased). To receive the full 100 percent exemption for property owned or leased on the January 1 lien date, the claim must be filed by February 15.

The following links provide additional information on the Free Library Exemption:

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LOW-VALUE ORDINANCE

A county board of supervisors may, under certain circumstances, exempt property that does not exceed a specified (low) value. In some cases, the total taxes, special assessments, and applicable subventions on a property would amount to less than the cost of assessing and collecting them (authorized by Section 7 of Article XIII, Revenue and Taxation Code section 155.20). This ordinance was enacted to recognize the practical reality that, notwithstanding the constitutional requirement that all property be taxed, certain assessments are not cost effective to pursue. In other words, the value of a property is too low to justify the costs of assessment and collection. This exemption is commonly referred to as the Low-Value Ordinance Exemption.

On an annual basis, each county board of supervisors has the discretion to determine the maximum value in which real or personal property in their county can not exceed to qualify for the Low-Value Ordinance Exemption. However, they have no authority to exempt real property with a base year value, or personal property with a full value, of more than $10,000.

The possessory interest (a possessory interest is created when a person or entity uses publicly owned real property which becomes subject to property tax assessment) low-value ordinance is set considerably higher than the real or personal property limit. For a temporary and transitory use in a certain public facilities, the maximum value that a county board of supervisors may exempt under the low-value ordinance may not exceed $50,000 (section 155.20(b)). The allowable facilities include publicly owned:

  • Fairgrounds
  • Fairground facilities
  • Convention or Cultural facilities, which includes publicly owned convention centers, civic auditoriums, theaters, assembly halls, museums, or other civic buildings, that is used primarily for staging any of the following:
  • Conventions, trade and consumer shows, or civic and community events
  • Live theater, dance, or musical productions
  • Artistic, historic, technological, or educational exhibits

Property excluded from this low value exemption (section 155.20(c)) consists of:

  • Open space lands and property of historical significance (Article XIII, Section 8)
  • Immature forest trees planted on lands not previously bearing merchantable timber or planted or of natural growth … (Article XIII, Section 3 (j)).
  • Non-profit golf courses (Article XIII, Section 10).
  • Lands owned by local governments that are outside their boundaries (Article XIII, Section 11).

This exemption does not require the claimant to file any claim forms. It is an administrative exemption on the county's option. For information on the Low-Value Ordinance Exemption, contact the county assessor of the county where the property is located.

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MUSEUMS

Property used for free museums is exempt by the Constitution (Section 3(d) of Article XIII of the California Constitution). Museums that charge admission may qualify for the Welfare Exemption.

Free Museum Exemption

The Free Museum Exemption is available to property used for museums that are free and open to the general public (see Revenue and Taxation Code section 202 and Section 3(d) of Article XIII of the California Constitution).

The museum must be open to the general public on a regular basis, and the public must be made aware that such is the case. Thus, there should be a sign on the property indicating the museum is open to the general public on a regular, scheduled, ongoing basis. For property tax purposes, regularly open to the public means open to the public not less than 20 hours per week for not less than 35 weeks of the 12-month period immediately preceding the lien date for the year for which the exemption is claimed (see Revenue and Taxation Code sections 217 and 217.1).

The property may be owned or leased, but it must be used for museums as of the January 1 lien date. For purposes of this exemption, museum is defined as a building that the predominant purpose is to house and display objects of lasting value. The Free Museum Exemption applies only if all of the following conditions are satisfied:

  1. Admittance to the museum is free; however, if donations are requested, the exemption is still allowed so long as no one is denied admission for failing to make a donation.
  2. The museum must be used primarily as such, although other uses for meetings, receptions, or a gift shop on the premises that sells museum related items and snacks for the convenience of patrons does not disqualify the exemption.
  3. The property must be regularly open to the public with regularly scheduled hours.
  4. The property must be identifiable as a museum with the public being made aware of the use and hours by signs and perhaps advertising such as in newspapers, promotional materials, and/or the telephone book's yellow pages.

To apply for the Free Museum Exemption, a claim form must be filed each year with the assessor of the county where the property is located. The claim form, BOE-268-B, Exemption for Property Used by a Free Library or Free Museum, is available from the county assessor (or claim form BOE-263, Lessor's Exemption Claim, if the property is leased). To receive the full 100 percent exemption for property owned or leased on the January 1 lien date, the claim must be filed by February 15.
The following links provide additional information on the Free Museum Exemption:

Welfare Exemption

Museums that charge admission may qualify for the Welfare Exemption. Property used exclusively for the charitable purposes of museums and owned and operated by a qualifying organization is specifically declared eligible for the Welfare Exemption in Revenue and Taxation Code section 214.14

  • Property used exclusively for the charitable purposes of museums includes property used for activities and facilities related to the primary charitable purpose of museums and reasonably necessary and incidental to those purposes.
  • Property is not required to be indispensable to the primary charitable purposes of museums.
  • Property is not used exclusively for the charitable purposes of museums if it is used for activities and facilities not related to the primary charitable purposes of museums and not reasonably necessary or incidental to those purposes.
  • Property used exclusively for the charitable purposes of museums includes property owned by a nonprofit association or organization performing auxiliary services to any city or county museum in the state and used for the storage of items donated for an annual rummage sale. The storage of such items is not considered a "fundraising activity" as used in Revenue and Taxation Code section 214(a)(3) and the proceeds, after expenses, from the sale of these items must be used to provide support to those museums.
  • Welfare Exemption

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PUBLIC SCHOOL EXEMPTION

Property used exclusively for public schools, community colleges, state colleges, and state universities is exempt from property taxation (article XIII, section 3, subd. (d) of the California Constitution, Revenue and Taxation Code section 202, subd. (a)(3)). The property is exempt from taxation on the basis of its exclusive use for public school purposes. If the property is not owned by the public school, the owner of the property is required to file a claim for the Lessor's Exemption. If the owner of the property does not claim the exemption, the public school may file the Public School Exemption claim.

A charter school, including a charter school operating as or by a nonprofit public benefit corporation, is exempt from property tax as a "public school." Property used by the charter school is exempt under the Public School Exemption.

To apply for the Public School Exemption, a claim form must be filed each year with the assessor of the county where the property is located. The claim form, BOE-268-A, Exemption for Property Used Exclusively by a Public School, is available from the county assessor (or claim form BOE-263, Lessor's Exemption Claim, if the property is leased). To receive the full 100 percent exemption for property owned or leased on the January 1 lien date, the claim must be filed by February 15.

The following links provide additional information on the Public School Exemption:

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RELIGIOUS EXEMPTION

The Religious Exemption may be claimed on property owned by a religious organization and used exclusively for religious purposes. (See Revenue and Taxation Code section 207.) This includes religious worship and school purposes, including preschools, nursery schools, kindergartens, schools of less than collegiate grade, or schools of collegiate grade and less than collegiate grade. The exemption is also available if another church uses the property part time for religious worship and operates a school, provided that the owner church continues to conduct worship services on the property.

To apply for the Religious Exemption, the church must file claim form BOE-267-S, Religious Exemption, with the county assessor where the property is located. The form is available from the county assessor. To receive the full 100 percent exemption for property owned or leased on the January 1 lien date, the claim must be filed by February 15. For example, to receive the exemption for fiscal year 2007-08, which runs from July 1, 2007, through June 30, 2008, the claim must be filed by February 15, 2007.

You only need to apply one time for the Religious Exemption. Once it is granted, the exemption remains in effect until it is terminated or the property is no longer eligible.

The following links provide additional information on the Religious Exemption.

See also Church and Welfare Exemption.

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TRIBAL HOUSING EXEMPTION

Low-income rental housing owned and operated by an Indian tribe or a housing entity designated by a tribe meeting certain requirements may be eligible for exemption (see Revenue and Taxation Code section 237). This exemption applies if the property and entity meet the following requirements:

  • At least 30 percent of the property's housing units are continuously available to or occupied by lower income households (as defined in Section 50079.5 of the Health and Safety Code or applicable federal, state, or local financing agreements), at rents that do not exceed those prescribed by Section 50053 of the Health and Safety Code, or rents that do not exceed those prescribed by the terms of the applicable federal, state, or local financing agreements or financial assistance agreements.
  • The housing entity is nonprofit.
  • No part of the net earnings of the housing entity benefit any private shareholder or individual.

Additionally, the property must be owned and operated by either (1) a federally recognized Indian tribe, or, (2) its tribally designated housing entity.

Federally Designated Recognized Tribes: The applicant tribe must be a federally "recognized" Indian tribe. The Bureau of Indian Affairs (BIA) maintains a list of federally recognized tribes on its website (www.doi.gov/bia/tribes/entry.html).

Tribally Designated Housing Entity: A housing entity must (1) be tribally designated by a federally recognized tribe, (2) be nonprofit, and, (3) have no part of its net earnings benefit any private shareholder or individual. An applicant that is a housing entity must provide a resolution from a federally recognized tribe designating it as a housing entity for the tribe.

To apply for the Tribal Housing Exemption, a claim must be filed each year with the assessor of the county where the property is located. The claim forms, BOE-237, Exemption of Low-Income Tribal Housing, and form BOE-237-A, Supplemental Affidavit for BOE-237 Housing-Lower Income Households are available from the county assessor. To receive the full 100 percent exemption for property owned on the January 1 lien date, the claim must be filed by February 15.

Claimants are required to submit the following information with the initial claim:

  1. Documents establishing that the designating tribe is federally recognized.
  2. Documents establishing that the housing entity has been designated by the tribe.
  3. Documents establishing that there is a deed restriction, agreement, or other legally binding document requiring that the property be used in compliance with section 237, subdivision (a), paragraph (2), subparagraph (A).

Claimants are to provide a description of the property for which exemption is claimed, including the entire project property and the portion for which the exemption is claimed (only the portion

that is occupied by qualified low-income tenants is exempt). If the property includes units that do not qualify for the exemption, the description must list the qualifying and nonqualifying units.

The following links provide additional information on the Tribal Housing Exemption:

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VESSEL EXEMPTIONS

Certain provisions of the California Constitution allow for vessel exemptions, either on a partial or full basis. Full exemptions include vessels having a low value, vessels considered business inventory (including those under construction), vessels of more than 50 tons burden engaged in the transportation of freight or passengers, and certain vessels with a historical value. In addition to these property tax exemptions, certain documented vessels (see Revenue and Taxation Code section 227) are granted the right to be assessed at 4 percent of their full cash value.

Other exemptions may also apply to vessels. For example, under certain conditions, a vessel may be eligible for theHomeowners' Exemption or the Disabled Veterans' Exemption. Also, a person on active duty in military service may declare the situs of his or her personal property to be his or her home state (personal property may be immune from taxation in the state where the individual is stationed on active duty).

Vessels with a Low Value

  • Market Value of $400 or Less
    A vessel with a market value of $400 or less are free from taxation (see Revenue and Taxation Code section 228). This exemption only applies to vessels used or held for non-commercial purposes and does not apply to lifeboats or other vessels used in conjunction with the operation of vessels with a market value of more than $400. In determining the market value of a vessel, a vessel's value should include all equipment such as mode of power and furnishings that are normally required aboard the vessel to accomplish the functions for which the vessel is being used. This exemption can only be applied to one vessel owned, claimed, possessed, or controlled by an assessee on the lien date.
  • County Low-Value Ordinance
    As described above, vessels with a market value of $400 or less are exempt from taxation. Each county's board of supervisors, however, may set its own Low-Value Exemption (see section 155.20). A county board of supervisors may choose to exempt property with a full value so low that, if not exempt, the taxes would amount to less than the cost of assessing and collecting them. In any case, a county board of supervisors has no authority to exempt personal property with a full value of more than $10,000.

Business Inventories

Business inventories (as described in Revenue and Taxation Code section 129 and Property Tax Rule 133) are eligible for exemption from taxation (see also section 219). Vessels intended for sale or lease in the ordinary course of business are considered to be business inventories. Vessels under construction, even those under a contract of sale, and the raw materials on hand not yet incorporated into a vessel are also included as business inventories. Business inventory also includes property held for lease or consignment by lessors, sublessors, and consignors.

Business inventory does not include property being used by its owner for any purpose not directly associated with the prospective sale or lease of that property. A vessel held for sale or

lease is not allowed the exemption if it has been, or is intended to be, used by the seller or lessor prior to or subsequent to its sale or lease.

The following link provides additional information on Vessels held for sale or lease and considered business inventory.

Exemption for Vessels of more than 50 Tons Burden

Vessels of more than 50 tons burden and engaged in the transportation of freight or passengers are exempt from property taxation (Article XIII, section 3, subdivision (l) of the California Constitution).

With respect to this exemption, "50 tons burden" shall mean "50 tons net burden" as registered in the United States Customs Office. Certificates of Documentation state the gross and net tonnage of a vessel. To qualify for the exemption, a vessel must be exclusively engaged in the transportation of freight or passengers or at least primarily so engaged. There is no proration of the exemption. Therefore, if a vessel qualifies, the exemption is allowed in its entirety. This applies even if the vessel is used 80 percent of the time in the exempt activity and 20 percent of the time in other activities, such as towing operations; incidental use for other purposes does not affect qualification for the exemption.

The following links provide additional information on exemption of vessels of more than 50 tons burden.

Vessels with Historic Value

As of January 1, 2001, wooden vessels of historical significance, and all other personal property used in their operation, are exempt from taxation if all of the following conditions are satisfied (see Revenue and Taxation Code section 230):

  • The owner and operator is a nonprofit organization that has qualified for exemption under either section 23701(d) of the Revenue and Taxation Code or under section 501(c)(3) of the Internal Revenue Code.
  • No part of the net earnings of the owner benefits any private shareholder or individual.
  • The vessel is used primarily as, or as a part of, a maritime museum that is regularly open to the public.
  • Income from fundraising use and use for charter activities does not exceed 40 percent of operating revenues of the vessel, and all net earnings are used to further the exempt activity of the museum.
  • To qualify for the exemption, the claimant is required to annually file by February 15 an affidavit furnished by the assessor.

For the purposes of this statute, "wooden vessels of historical significance" is defined as any wooden vessel that is a refurbished original, wooden inland waters vessel of 47 feet or larger, built in California during or prior to 1910, that continuously thereafter has remained in California waters, and that has been designated a California State Historical Landmark.

To apply for the Vessels of Historical Significance Exemption, a claim must be filed each year with the assessor of the county where the property is located. The claim form is available from the county assessor. To receive the full 100 percent exemption for property owned on the January 1 lien date, the claim must be filed by February 15.

4 Percent Assessment for Qualifying Documented Vessels

Certain documented vessels are assessed at 4 percent of their full cash value, which amounts to a virtual exemption (see Revenue and Taxation Code section 227 and Property Tax Rule 151). A documented vessel, for California property tax purposes, is a vessel with a valid marine document nationally registered with the U.S. Coast Guard or one registered or licensed by the State of California through the DMV. Vessels qualifying for the reduced assessment are documented vessels that are engaged or employed exclusively in any of the following:

  • In the taking and possession of fish or other living resource of the sea for commercial purposes.
  • In instruction or research studies as an oceanographic vessel.
  • In carrying or transporting seven or more people for hire for commercial passenger fishing purposes and holds a current certificate of inspection issued by the United States Coast Guard. A vessel shall not be deemed to be engaged or employed in activities other than the carrying or transporting of seven or more persons for hire for commercial passenger fishing purposes by reason of that vessel being used occasionally for dive, tour, or whale watching purposes. For purposes of this subdivision, "occasionally" means 15 percent or less of the total operating time logged for the immediately preceding assessment year.

To qualify for the 4 percent preferential assessment, the vessel need not be owned by the taxpayer, but only used for one of the qualifying purposes identified above (see section 227). If the vessel is leased out on the lien date and the lessee uses the vessel for the purposes set forth in this statute, the lessor or lessee should apply for the preferential assessment. Vessels documented out of state may also qualify for the 4 percent special assessment.

To apply for the for the 4 percent preferential assessment, a claim must be filed each year with the assessor of the county where the property is located. The claim form, BOE-576-E, Affidavit for 4 Percent Assessment of Certain Vessels,is available from the county assessor. To receive the full 100 percent exemption for property owned on the January 1 lien date, the claim must be filed by February 15. Certain documentation must be attached to the claim form.

Claim forms filed for vessels used as research vessels (qualifying under section 227, subdivision (b)) should include the following:

  • The contract, statement, or agreement from the respective organization outlining the nature of the research and the time duration attached to the affidavit.
  • A copy of the Certificate of Documentation that indicates the vessel's official classification as an oceanographic research vessel.

Claim forms filed for vessels used for carrying or transporting seven or more people for hire for commercial passenger fishing purposes (qualifying under section 227, subdivision (c)) should include a copy of either of the following:

  • The Certificate of Inspection, Form CG3753, or
  • Temporary Certificate of Inspection, Form CG854. The Certificate of Inspection for most passenger vessels is valid for a 5-year period, except for vessels carrying more than 12 passengers on international voyages, which require annual inspections.

The following links provide additional information on 4 percent assessment for qualifying documented vessels:

Homeowners' Exemption

If a vessel is the owner's principal place of residence on the lien date, January 1, the owner may apply the $7,000 Homeowners' Exemption to it (see Revenue and Taxation Code section 218).

If a vessel is the owner's residence and also qualifies for the Documented Vessel Exemption (section 227), the vessel owner may only claim one of the exemptions. The nature of many fishing boats is such that they are commonly equipped with living quarters so the vessels may make extended cruises in search of their catch. A crew will live on the vessel while on the high seas, and there is nothing in the exemption statutes to imply that the owner or crew must leave the vessel while in port. The vessel, however, must be used as a full-time commercial fishing vessel to qualify for the Documented Vessel Exemption. If the use of the vessel as a residence interferes with the fishing activities, or if the vessel is primarily a residence and commercial fishing is only incidental, then the vessel is not "engaged or employed exclusively" for any of the specified activities. Thus, a vessel owner must elect and properly claim only one of these exemptions.

Disabled Veterans' Exemption

The Disabled Veterans' Exemption provides that the first $100,000 or $150,000 (as adjusted for a prescribed inflation factor) of a vessel's full value may be exempted from property taxation if the vessel is owned by disabled veteran, or the spouse, jointly or separately, or the unmarried surviving spouse. The higher exemption amount is afforded to a veteran whose household income does not exceed $40,000 (as adjusted annually for inflation) (see Revenue and Taxation Code section 205.5). To be eligible for the exemption, the veteran, or the veteran's unmarried surviving spouse, must occupy the vessel as his or her principal place of residence.

Servicemembers Civil Relief Act of 2003

The Servicemembers Civil Relief Act of 2003 provides that a person on active duty in military service may declare the situs (the place where property is legally situated) of his or her personal property to be his or her home state or county. This declaration renders the personal property immune from taxation in the state where the individual is stationed on active duty. This act does not provide for an exemption from personal property taxation. Instead, it establishes tax situs of the property and thus establishes an exception to the general rule that personal property has its tax situs at the place it is located. The taxing agency with jurisdiction as the servicemember's domicile may tax the property if the laws so provide. This rule of tax situs is applicable whether the servicemember's domicile is another county of California or elsewhere within the United States.

If a servicemember on active duty in California who claims residency in another state has a vessel, the vessel is immune from property taxation in California. A servicemember who declares situs of his or her personal property to be located elsewhere must complete form BOE-261-D, Servicemembers Civil Relief Act Declaration. The declaration may be filed at any time with the assessor of the county where the personal property is located without penalty or interest.

The following links provide additional information on vessels exemption under the Soldiers' and Sailors' Civil Relief Act of 1940.

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VETERANS' EXEMPTION

The Veterans' Exemption provides exemption of property not to exceed $4,000 for qualified veterans who own limited property (see Revenue and Taxation Code section 205). The Veterans' Exemption may be claimed by a person currently serving in the military service or one who has been honorably discharged, the unmarried surviving spouse or either parent of a deceased veteran meeting the service requirements. In order to qualify for this exemption, the claimant may not own property, real or personal, worth more in aggregate than $5,000 if the claimant is single. If married, the couple may not own property worth more than $10,000. In addition, the claimant must have lived in California on the lien date, January 1.

In order to qualify for the Veterans' Exemption, a person must first be considered a veteran by the government by meeting certain criteria regarding his or her service as a veteran. A veteran means either of the following:

  • A person serving or has served in and has been discharged under honorable conditions from service, in the United States Army, Navy, Air Force, Marine Corps, Coast Guard, or Revenue Marine (Revenue Cutter) Service; and served in any of the following (Article XIII, section 3, subdivisions (o), (p), and (q) California Constitution):
  • in time of war
  • in time of peace in a campaign or expedition for which a medal has been issued to the veteran by Congress
  • in time of peace and because of a service-connected disability was released from active duty

Persons from the National Guard or National Guard Reserve who are called into active service as part of the Armed Forces of the United States may also qualify for the Veterans' Exemption.

There are 26 wars and 4 campaigns that qualify for the Veterans' Exemptions under subdivisions (o), (p), and (q) of Section 3 of Article XIII (section 205). The majority of the wars and campaigns listed are over 100 years ago, dating back to the Revolutionary War. Twenty-one of the 26 wars that ended prior to 1892 are not listed below since the likelihood of any qualified veterans, or if deceased, their spouses or parents, are no longer living. The following wars or campaigns are those which may still have living qualified claimants:

  • War with Germany-Austria, April 6, 1917 - November 11, 1918
  • World War II, December 7, 1941 - January 1, 1947
  • Campaign against the North Koreans and Chinese Communists in Korea, June 27, 1950 - January 31, 1955
  • Campaign against the Viet Cong and North Vietnamese Communists in South Vietnam, August 5, 1964 - May 8, 1975
  • First Nicaraguan campaign, July 29, 1912 - November 14, 1912
  • Second Nicaraguan campaign, August 27, 1926 - January 2, 1933
  • Yangtze River campaign in China, September 3, 1926 - October 21, 1927 or March 1, 1930 - December 31, 1932
  • All other campaigns for service in which a medal has been issued to the veteran by the Congress of the United States

To apply for the Veterans' Exemption, a claim must be filed each year with the assessor of the county where the property is located. The claim form, BOE-261, Claim for Veterans' Exemption, is available from the county assessor. To receive the full 100 percent exemption for property owned on the January 1 lien date, the claim must be filed by February 15.

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WELFARE EXEMPTION

Museums that charge admission may qualify for the Welfare Exemption.  Property used exclusively for the charitable purposes of museums and owned and operated by a qualifying organization is specifically declared eligible for the Welfare Exemption in Revenue and Taxation Code section 214.14

  • Property used exclusively for the charitable purposes of museums includes property used for activities and facilities related to the primary charitable purpose of museums and reasonably necessary and incidental to those purposes.
  • Property is not required to be indispensable to the primary charitable purposes of museums.
  • Property is not used exclusively for the charitable purposes of museums if it is used for activities and facilities not related to the primary charitable purposes of museums and not reasonably necessary or incidental to those purposes.
  • Property used exclusively for the charitable purposes of museums includes property owned by a nonprofit association or organization performing auxiliary services to any city or county museum in the state and used for the storage of items donated for an annual rummage sale. The storage of such items is not considered a "fundraising activity" as used in Revenue and Taxation Code section 214(a)(3) and the proceeds, after expenses, from the sale of these items must be used to provide support to those museums.
  • Welfare Exemption

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WORKS OF ART

This exemption provides a property tax exemption for certain works of art that are made available for display in an art gallery or museum (see Revenue and Taxation Code (section 217).

One of the primary requirements to qualify for the exemption is that works of art must be available for public display in the art gallery or museum for a period of 90 days during the 12-month period immediately preceding the lien date for the year for which the exemption is claimed. Available for display requires actual display or documented willingness to display for a specified period. Viewing by "appointment only" is insufficient. Unlike most other exemptions, there is no requirement that the art work be on or available for display on lien date January 1.

The Works of Art Exemption applies to artwork that is generally assessable except that it is loaned to a qualifying museum or art gallery. Assessable works of art include, but not limited to those displayed in a for-profit museum or gallery or those displayed in a business or office (i.e. décor).

The museum in which works of art is displayed must be publicly owned or one that is regularly open to the public and operated by a nonprofit organization that qualifies for exemption under section 23701d. Regularly open to the public means that the museum was open to the public not less than 20 hours per week for not less than 35 weeks of the 12-month period immediately preceding the lien date for the year for which the exemption is claimed.

The following works of art are eligible for the Works of Art Exemption (section 217(a)):

  1. Original paintings in oil, mineral, water, vitreous enamel, or other colors, pastels, original mosaics, original drawings and sketches in pen, ink, pencil, or watercolors, or works of the free fine arts in any other media including applied paper and other materials, manufactured or otherwise, that are used on collages, artists' proof etchings unbound, and engravings and woodcuts unbound, lithographs, or prints made by other hand transfer processes unbound, original sculptures or statuary.
    1. Sculpture and statuary shall include professional productions of sculptors only whether in round or in relief, in bronze, marble, stone, terra cotta, ivory, wood, metal, or other materials, or whether cut, carved, or otherwise wrought by hand from the solid block or mass of marble, stone, alabaster, or from metal, or other materials, or cast in bronze or other metal or substance, or from wax or plaster, or constructed from any material or made in any form as the professional productions of sculptors, only.
    2. Original when used to modify the words "sculptures" and "statuary" shall include the original work or model and the first 10 castings, replicas, or reproductions made from the sculptor’s original work or model with or without a change in scale, regardless of whether or not the sculptor is alive at the time the castings, replicas, or reproductions are completed.
    3. Painting, mosaic, drawing, work of the free fine arts, sketch, sculpture, and statuary shall not include any articles of utility, articles designed for industrial use, or any articles that are made wholly or in part by stenciling or any other mechanical process.
    4. Etchings, engravings, and woodcuts, lithographs, or prints made by other hand transfer processes, shall include only works that are printed by hand from plates, stones or blocks etched, drawn, or engraved with hand tools and do not include works that are printed from plates, stones or blocks etched, drawn or engraved by photochemical or other mechanical processes.
  2. Original works of the free fine arts that are not described in number one listed above, are subject to regulations as the board may prescribe, to prove that the article represents some school, kind or medium of the free fine arts. Original works of the free fine arts shall not include any article of utility or any article designed for industrial use

The Works of Art Exemption applies only if the artwork is available for display in:

  • a publicly owned art gallery or museum
  • a museum that is regularly open to the public and that is operated by a nonprofit organization that qualifies for (income tax) exemption pursuant to section 23701d.

To apply for the Works of Art Exemption, a claim form must be filed each year with the assessor of the county where the property is located. The claim form, BOE-260, Certificate and Affidavit for Exemption of Work or Art, is available from the county assessor.

The artwork must meet the qualifications for the exemption each year and the claim must be filed annually with the assessor by 5:00 p.m., February 15, for the preceding January 1 lien date (the exemption is waived if the claimant fails to file by February 15).

Works of art owned by a public art gallery or museum or a welfare exempt non-profit organization are exempt under California Constitutional Provisions, Article XIII, Sections 3(a), 3(b), or 4(b). Works of art owned by individuals or trusts in which the beneficiaries are individuals and used for private enjoyment are exempt under Article XIII,Section (m). This exemption does not apply to any works of art loaned by any person who holds the artwork primarily for purposes of sale (section 217)(d)), which may be exempt under business inventory.

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