Chicago Estate Planning Attorney — Property Tax Exemptions for Illinois Nonprofits
Historically, countless Illinois nonprofits have enjoyed property tax exemptions for their charitable, educational, or religious missions. Today, the Illinois Department of Revenue (DOR) is much more strict when it comes to examining Illinois nonprofits for property tax exemption eligibility. For example, some nonprofits might not be eligible if they accept member fees, receive government funding, operate a child care center, or use the property for more than one exempt reason. In fact, these restrictions on property tax exemptions were affirmed in the landmark Illinois case, Provena Covenant Medical Center v. Department of Revenue (decided on March 18, 2010).
If your nonprofit organization is seeking property tax exemptions, or your nonprofit was denied property tax exemption ineligibility, then it is important to contact an Illinois nonprofit attorney as soon as possible. At James C. Provenza & Associates, P.C., we’ll thoroughly examine your nonprofit and its property and determine whether or not the property can be exempt. If so, we’ll diligently represent your case and push for Illinois tax exemptions. To speak with James C. Provenza regarding your property, call us today at (847) 729-3939.
Property Exemption Requirements
For a nonprofit’s property to qualify for tax exemptions, Illinois law requires that the property is solely used (exclusively) for exempt purposes. Additionally, the property cannot operate with a “view to profit.” These two requirements are detailed below:
- Exclusive use for exempt purposes — A nonprofit must only use its property for its tax-exempt purposes. For example, a nonprofit with a tax-exempt status (for various reasons) can only perform those “exempt” operations. If a nonprofit isn’t using the property solely for tax-exempt purposes, then the organization may lose its property tax exemption.
- View to profit — This is a term describing a whole array of activities that are seen as “incompatible” with property tax exemption principles. For example, if the nonprofit charges fees, rejects those who cannot pay the fees, uses collection agencies, etc, then the nonprofit may lose its property tax exemption.
According to the Illinois Tax Code, there are several categories that are considered as tax-exempt purposes. In terms of property tax exemptions, some of the recognized categories include:
- Religious exemptions
- Education qualifications
- Charitable exemptions
It is important to note that, in many cases, the religious and educational nonprofits cannot use the property for child care centers or preschools. Furthermore, if you have a charitable organization, you can conduct a simple test to see if your organization might qualify for the property tax exemption. Some questions to ask include:
- Are the benefits for an indefinite number of persons?
- Does the organization have capital or earn profits and dividends?
- Does the organization derive funds mainly from public and private charity?
- Does the organization dispense the charity to anyone who needs it?
- Does the organization use the property exclusively for charitable purposes?
Contact James C. Provenza & Associates, P.C. Today
To successfully acquire a property tax exemption from the Illinois Department of Revenue (DOR), you may need to conduct a substantial administrative filing process. Having a nonprofit attorney at your side will be crucial during this process; your attorney will provide legal counsel and prepare, submit, and follow through on applications.
Illinois laws regarding property tax exemptions has changed quite significantly over the past couple years, and it is essential to have legal counsel who is knowledgeable and up-to-date on all nonprofit and tax-exemption laws. With nonprofit attorney James C. Provenza at your side, we’ll provide comprehensive and thorough representation and counsel regarding your organization’s property tax exemption. To speak with James C. Provenza, call our Chicago nonprofit law office today at (847) 729-3939 today!