A new farm tractor purchased and filed tax exempt.
Full Question:
Answer:
To be recognized as exempt from federal income taxation, most organizations are required to apply for recognition of exemption. For section 501(c)(3) organizations, the law provides only limited exceptions to this requirement. Applying for recognition of exemption results in formal IRS recognition of an organization’s status, and may be preferable for that reason.
The IRS will recognize an organization as tax-exempt if it meets the requirements of the Internal Revenue Code. See Types of Tax-Exempt Organizations and Publication 557 , Tax-Exempt Status for Your Organization, for more information.
Organizations applying for tax-exempt status must submit two applications: First, if they have not previously received an Employer Number (EIN), they must apply for one, and second, an application for recognition of exemption.
The IRS sometimes recognizes a group of organizations as tax-exempt if they are affiliated with a central organization. This avoids the need for each of the organizations to apply individually. See Publication 4573, Group Exemptions, for more information. To qualify for tax exemption from state taxes, the entity generally must be a charitable or educational institution or to the state or a political subdivision.
The following are OH statutes:
§ 5709.07. (A) The following property shall be exempt from taxation:
(A) The following property shall be exempt from taxation:
(1) Public schoolhouses, the books and furniture in them, and the ground
attached to them necessary for the proper occupancy, use, and enjoyment of
the schoolhouses, and not leased or otherwise used with a view to profit;
(2) Houses used exclusively for public worship, the books and furniture
in them, and the ground attached to them that is not leased or otherwise
used with a view to profit and that is necessary for their proper
occupancy, use, and enjoyment;
(3) Real property owned and operated by a church that is used primarily
for church retreats or church camping, and that is not used as a permanent
residence. Real property exempted under division (A)(3) of this section may
be made available by the church on a limited basis to charitable and
educational institutions if the property is not leased or otherwise made
available with a view to profit.
(4) Public colleges and academies and all buildings connected with them,
and all lands connected with public institutions of learning, not used with
a view to profit, including those buildings and lands that satisfy all of
the following:
(a) The buildings are used for housing for full-time students or
housing-related facilities for students, faculty, or employees of a state
university, or for other purposes related to the state university's
educational purpose, and the lands are underneath the buildings or are used
for common space, walkways, and green spaces for the state university's
students, faculty, or employees. As used in this division, "housing-related
facilities" includes both parking facilities related to the buildings and
common buildings made available to students, faculty, or employees of a
state university. The leasing of space in housing-related facilities shall
not be considered an activity with a view to profit for purposes of
division (A)(4) of this section.
(b) The buildings and lands are supervised or otherwise under the
control, directly or indirectly, of an organization that is exempt from
federal income taxation under section 501(c)(3) of the Internal Revenue
Code of 1986, 100 Stat. 2085, 26 U.S.C. 1, as amended, and the state
university has entered into a qualifying joint use agreement with the
organization that entitles the students, faculty, or employees of the state
university to use the lands or buildings;
(c) The state university has agreed, under the terms of the qualifying
joint use agreement with the organization described in division (A)(4)(b)
of this section, that the state university, to the extent applicable under
the agreement, will make payments to the organization in amounts sufficient
to maintain agreed-upon debt service coverage ratios on bonds related to
the lands or buildings.
(B) This section shall not extend to leasehold estates or real property
held under the authority of a college or university of learning in this
state; but leaseholds, or other estates or property, real or personal, the
rents, issues, profits, and income of which is given to a municipal
corporation, school district, or subdistrict in this state exclusively for
the use, endowment, or support of schools for the free education of youth
without charge shall be exempt from taxation as long as such property, or
the rents, issues, profits, or income of the property is used and
exclusively applied for the support of free education by such municipal
corporation, district, or subdistrict. Division (B) of this section shall
not apply with respect to buildings and lands that satisfy all of the
requirements specified in divisions (A)(4)(a) to (c) of this section.
(C) For purposes of this section, if the requirements specified in
divisions (A)(4)(a) to (c) of this section are satisfied, the buildings and
lands with respect to which exemption is claimed under division (A)(4) of
this section shall be deemed to be used with reasonable certainty in
furthering or carrying out the necessary objects and purposes of a state
university.
(D) As used in this section:
(1) "Church" means a fellowship of believers, congregation, society,
corporation, convention, or association that is formed primarily or
exclusively for religious purposes and that is not formed for the private
profit of any person.
(2) "State university" has the same meaning as in section 3345.011
[3345.01.1] of the Revised Code.
(3) "Qualifying joint use agreement" means an agreement that satisfies
all of the following:
(a) The agreement was entered into before June 30, 2004;
(b) The agreement is between a state university and an organization
that is exempt from federal income taxation under section 501(c)(3) of
the Internal Revenue Code of 1986, 100 Stat. 2085, 26 U.S.C. 1, as
amended; and
(c) The state university that is a party to the agreement reported to the
Ohio board of regents that the university maintained a headcount of at
least twenty-five thousand students on its main campus during the academic
school year that began in calendar year 2003 and ended in calendar
year 2004.
Please see the information at the following links:
http://www.irs.gov/charities/content/0,,id=96931,00.html
http://www.irs.gov/pub/irs-pdf/p557.pdf
http://www.irs.gov/pub/irs-pdf/p4573.pdf
http://www.irs.gov/charities/nonprofits/article/0,,id=164296,00.html
