Property Tax Exemptions

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Please verify that the non-profit organization's correct mailing address is listed on all forms
BEFORE submitting any of the applications listed on this page.

Exemption Filing -
New & Annual Recertification

The Utah State Tax Commission has established by statute and decisions of the Commission that it is the responsibility of the non-profit organization to prove they are eligible for an exemption. Therefore, please pay close attention to the questions asked on the application and what documents are required. Failure to provide all documentation may cause the exemption to be denied.

New Privilege Tax Exemptions

Individuals who lease/own property that is located on real property owned by a government or tax-exempt organization may be subject to a Privilege Tax (Utah Code 59-4-101). Individuals, non-profit, and charitable organizations may apply for a Privilege Tax Exemption and the property in question cannot be used in a for-profit manner. For all new applications, the Board of Equalization will determine if the individual or organization meets all the requirements.


New Non-Profit Exemptions and Annual Renewals

Non-profit and charitable organizations are eligible to apply to have their real property and personal business property to be exempt from taxation (Utah Code 59-2-1101 and Utah State Constitution, Article XIII, Section 3). For those organizations that already receive the exemption, they are required to fill out and return an Annual Statement for Continued Property Tax Exemption each year.

Which non-profit organziations qualify for an exemption? Click to Expand
A "nonprofit organization" is defined by U.S.C. 59-2-1101(1)(g)(i) in the following way.
  • that is organized on a nonprofit basis, that dedicates the entity's property to the entity's nonprofit purpose, and that makes no dividend or other form of financial benefit available to a private interest;
  • for which, upon dissolution, the entity's assets are distributable only for exempt purposes under state law or to the government for a public purpose;
  • that does not receive income from any source, including gifts, donations, or payments from recipients of products or services, that produces a profit to the entity in the sense that the income exceeds operating and long-term maintenance expenses; and
  • for which none of the net earnings or donations made to the entity inure to the benefit of private shareholders or other individuals, as the private inurement standard has been interpreted under Section 501(c)(3), Internal Revenue Code.
"Nonprofit organization" also includes the following as defined by U.S.C. 59-2-1101(1)(g)(ii).
  • An organization that is treated as a disregarded entity for federal income tax purposes and wholly owned by, and controlled under the direction of, a nonprofit entity; AND
  • Which none of the net earnings and profits of the entity inure to the benefit of any person other than a nonprofit entity.
In addtion, a nonprofit organization must meet one of the three criteria listed below.
  • "Charitable purpose" defined as:
    • Property used as a nonprofit hospital or a nursing home, the standards outlined in Howell v. County Board of Cache County ex rel. IHC Hospitals, Inc., 881 P.2d 880 (Utah 1994); AND
    • Property other than property described in Subsection (1)(a)(i), providing a gift to the community.
  • "Educational purposes" means purposes carried on by an educational organization that normally:
    • Maintaining a regular faculty and curriculum; AND
    • Has a regularly enrolled body of pupils and students.
    "Educational purposes" also includes:
    • the physical or mental teaching, training, or conditioning of competitive athletes by a national governing body of sport recognized by the United States Olympic Committee that qualifies as being tax exempt under Section 501(c)(3), Internal Revenue Code; AND
    • an activity in support of or incidental to the teaching, training, or conditioning described above.
  • Religious organization defined as:
    • Any organization that has a religious exemption under IRS 501(c)(3) guidelines.

Is all property owned by a nonprofit organization eligible to be exempted? Click to Expand
As defined by U.S.C. 59-2-1101(1)(c) any property owned by a nonprofit organization that is used exclusively for a charitable, educational, or religious purpose may be eligible for exemption from property tax.

Qualification for an exemption is contiquent upon ownership AND use. A property that is owned by an individual or for-profit business, but leased or, in someother way, used by a non-profit organization cannot be exempted. Also, property owned by a nonprofit organization but leased or, in some other way, used by an individual or for-profit organization may be subject to taxation.

The Utah Supreme Court has determined that although exclusivity should be strictly construed, minor deviations from “exclusive use” should not automatically defeat an exemption. Clearly defined sections of a property can also qualify for an exemption even if other sections are used for profit, or another non-qualifying purpose. [Loyal Order of Moose 259 v. Salt Lake County Board of Equalization (657 P2d 257), 1982].

When can an organization apply for a new exemption on a property? Click to Expand
When a non-profit entity acquires property on or after January 1 that may qualify for an exclusive use exemption, that entity may apply for the exclusive use exemption on or before the later of MARCH 1ST (or the next business day if the 1st falls on a weekend) or 30 days after the property is acquired (§§ 59-2-1101 and 59-2-1102). If an exemption is not applied for by March 1st, they will be required to apply during the next application period starting January 1st through March 1st of the next year. Utah State statute currently does not provide for an entity to apply for a new exemption after the deadline of March 1st or more than 30 days after the acquisition of a new property.

!!PLEASE NOTE!! In the past, it has been the practice of the Utah County Board of Equalization to accept "Late" applications from an organization who filed after the March 1st or 30 day deadline. An organization was allowed to provide the Board with a written statement explaining why they missed the filing deadline. If the Board deemed the explanation reasonable the application would accepted and considered timely filed. After a review of state statute and the guidelines provided by the Utah State Tax Commission, it has been determined this practice is not supported and has been discontinued.

Does an organization need to reapply each year? Click to Expand
After the Board of Equalization initially grants an organization a property tax exemption, the organization is required to file an "ANNUAL STATEMENT FOR CONTINUED PROPERTY TAX EXEMPTION" each subsequent year. This statement confirms their continued non-profit status and exclusive use of the property to maintain the property's tax exemption (§ 59-2-1102).

The annual statement is required to be filed with the county by MARCH 1ST each year. If the form is not received by March 1st (or the next business day if the 1st falls on a weekend), the organization will be notified by First Class and Certified Mail of the Board's intention to revoke the exemption on or before April 1 (§ 59-2-1102).

What are the requirements for a property to be considered exclusively charitable? Click to Expand
The following criteria for determining charitable purpose were established by the Utah Supreme Court in Utah County v. Intermountain Health Care Inc (709 P2d 265), 1985. These criteria are used by the Board of Equalization to determine if a property is being used exclusively for a charitable purpose.

  • Whether the stated purpose of the entity is to provide a significant service to others without immediate expectation of material reward.
  • Whether the entity is supported, and to what extent, by donations and gifts.
  • Whether the recipients of the charity are required to pay for the assistance received, in whole or in part; whether there is “material reciprocity”.
  • Whether the income received from all sources (gifts, donations, and payment from recipients) produces a profit to the entity in the sense that the income exceeds operating and long-term maintenance expenses.
  • Whether the beneficiaries of the charity are restricted or unrestricted and, if restricted, whether the restriction bears a reasonable relationship to the entity’s charitable objectives.
  • Whether dividends or some other form of financial benefit, or assets upon dissolution, are available to private interests, and whether the entity is organized and operated so that any commercial activities are subordinate or incidental to charitable ones.
This set of criteria does not apply to property being used exclusively by a religious or educational organization unless the organization is also applying for an exemption as charitable organization also.

What does it mean to “contribute something of value to the common good of the community” to be approved for an exclusive charitable use exemption? Click to Expand
Providing a common good and the act of giving is a necessary element in charitable purpose. Use the following questions as a guide when completing a new exemption application.

  • Does an individual or group sacrifice for the welfare of the community, i.e. the act of giving itself?
  • It is a service or gift provided by public agencies federally or in other states?
  • It is a service or gift provided by other charitable groups, suggesting widespread recognition?
  • Or is a gift provided that could not otherwise be obtained by the beneficiaries without assistance from a nonprofit entity? [Salt Lake County v. TAX COMMISSION, ETC., 596 P.2d 641 (Utah 1979)], [Yorgason v. County Bd. of Equalization,714 P.2d 653 (Utah 1986)] and [Petitioner v. County Board of Equalization of County 1 (UTC Appeal No. 15-1)]
If the answers is yes to one of the above 4 questions, the use would be considered contributing something of value to the common good which is required to meet the exemption for charitable purposes.

Can vacant land receive an exemption? Click to Expand
Vacant Land which is not actively used by the religious, charitable, or educational organization, is not deemed to be devoted exclusively to exempt purposes, and therefore not exempt from property taxes. If the vacant land is being held for future development or utilization by an organization, it is deemed not exclusively used for exempt purposes, and therefore not tax exempt. The vacant land will remain taxable until either construction commences or a building permit is issued for construction of improvements that are intended for exclusive use.

Will my organization need to be represented at the Board of Equalization Meeting for the exemption to be approved? Click to Expand
Utah State Code 59-2-1102(3)(a)(ii) states the County Board of Equalization cannot grant and exemption unless the party affected or the party’s agent “appears before the county board of equalization and shows facts upon which it is claimed the reduction should be made, or exemption granted.”

Typically the Board only requires organizations applying for an exemption for the first time to send a representative to appear and answer questions. This would apply to organizations that have never been granted an exemption and organizations requesting an exemption for newly acquired property for the first time. Organizations that are submitting the Annual Statement for renewal of their exemption do not need to plan on appearing unless requested to do by the Board.

Utah Tax Exemption Laws

Property Exemption Laws
Title 59, Chapter 2 "Property Tax Act", Part 11 "Exemptions, Deferrals, and Abatements"

U.S.C. 59-2-1101
Definitions -- Exemption of certain property -- Proportional payments for certain property -- Exception -- County legislative body authority to adopt rules or ordinances.

U.S.C. 59-2-1102
Determination of exemptions by board of equalization -- Appeal -- Application for exemption -- Annual statement -- Exceptions.

Utah State Tax Commission
Standard of Practice
Standard 2 - Exemptions

Appeal a Decision of the County to the State

All applications are reviewed by the County Attorney's office and the Board of Equalization. Organizations that have their exempt status denied or revoked may appeal the decision of the Board of Equalization to the Utah State Tax Commission.