SENATE BILL REPORT

SB 6292

BYSenators Zimmerman, Bauer, Smith, Conner and DeJarnatt

Revising the property tax exemption for public assembly halls and meeting places.

Senate Committee on Ways & Means

Senate Hearing Date(s):January 25, 1988

Majority Report:  Do pass.

      Signed by Senators McDonald, Chairman; Craswell, Vice Chairman; Bauer, Bluechel, Cantu, Deccio, Gaspard, Lee, Saling, Smith, Vognild, Warnke, Wojahn, Zimmerman.

Senate Staff:William Bafus (786-7437)

                  January 25, 1988

AS PASSED SENATE, FEBRUARY 5, 1988

BACKGROUND:

Present law provides an exemption from taxes on real and personal property owned by nonprofit organizations and used in the operation of a public meeting hall or assembly place.  Improved property may be no larger than one acre.  Essentially unimproved property except for restrooms and buildings used in annual community celebrations may be up to 29 acres in size.  The exemption is nullified if the property is used for monetary gain or to promote business other than fund raising activities conducted by the nonprofit organization.

There have been some cases where organizations conducting annual community celebrations have rented part of their property to, or made other arrangements with, outside concessionaires who run carnivals or other activities in conjunction with the celebration.  The Department of Revenue has interpreted this as the promotion of business and has denied the property tax exemption to these organizations.

SUMMARY:

The loan or rental of otherwise exempt property to a concessionaire for activities in conjunction with an annual community celebration or other permissible activity does not nullify the property tax exemption to which a nonprofit organization would be entitled.  The concessionaire charges must be agreed to by the organization.  The rental income, if any, must be reasonable and devoted solely to the operation and maintenance of the property.

Appropriation:    none

Revenue:    none

Fiscal Note:      available

Senate Committee - Testified: No one