Nonprofit Property Tax Exemption

Nonprofit Property Tax Exemption Information & Resources

ALERT: TAX-EXEMPT ORGANIZATIONS ALERT – PROPERTY TAX EXEMPTION M-3 DUE
Deadline November 1, 2021 for all nonprofits

This is the year the quadrennial tax-exempt application (M-3) is due. The M-3 is required every four years from nonprofits for each property requesting an exemption. The tax assessor in your municipality determines if an organization is eligible for exemption. The tax exempt application must be filed by November 1st for property owned October 1st. Property tax exemption is not automatic.

M-3 Tax Exemption applications are available on your town’s website, usually on the Tax Assessor or Tax Department webpage.

Additional documents that may be requested to be included with your tax-exempt application, include IRS Ruling document, State of CT Sales Tax Exemption, Secretary of State filings, copy of bylaws, 990s, financial statements, revenue sources information, property descriptions, and more.

M-3 property tax exempt applications are due November 1st statewide.

CT Office of Legislative Research – Property Tax Exemptions for Nonprofits (June 30, 2020)

 

Genesis for this webpage and articles of local interest:

Nonprofit no more: Norwich assessor denies tax exemptions to agencies (The Day, April 25, 2018)

Norwich assessor: Nonprofits not automatically exempt (Norwich Bulletin, April 26, 2018)

Several Norwich nonprofits lost tax exempt status (WTNH, April 26, 2018)

Dozens of Nonprofits Denied Tax Exempt Status as Towns and Cities Look for More Revenue (WNPR, May 1, 2018)

Norwich Nonprofits Dealt a Cruel Blow as Property Taxes are Assessed (Nonprofit Quarterly, April 26, 2018)

 

In general, five criteria utilized by Assessors to determine exemption:
  • Review of the purpose of organization and if it is charitable, review of sources of income (cannot be self-sustaining), and review of organization’s ability to alleviate the state of a burden. Organization must be organized exclusively for charitable purposes and must be intended to function with aid from some private charitable support and must seek out and receive such financial support.
  • Review that the property is used exclusively for the purposes intended. In general, most towns/cities allow for partial determinations in which a portion of property is taxable and portion is exempt. CGS 12-88 allows for partial exemptions.
  • Review of use of property to determine that it is being used exclusively for intended purposes. Exempt org may rent/lease to another exempt org and property remains exempt. Exempt org may rent/lease to a for profit and property is taxable.
  • No subsidized housing is exempt
  • No low-income housing is exempt

CT Legal Review of Statute
For the CT OFFICE OF LEGAL REVIEW- Municipal Personal Property Tax

St. Joseph’s Living vs Town of Windham SC 17916 Summary (Not a legal summary)
Summary developed by Director of Assessment Stonington
St. Joseph’s Living vs Town of Windham SC 17916

Town By Town Assessor Information At-A-Glance (Notes from 2018 and 2019)
Quadrennial Tax Exemption Application (2013, 2017, 2021) M-3 Filing
Town by Town At a Glance- Assessor Info M-3

Nonprofit Tax Exemption- Public Forum
Powerpoint Presentation (pdf) May 21, 2018

 

CT State Statute:
Sec. 12-81. Exemptions. The following-described property shall be exempt from taxation:
For sections 12-81 (1-6 and 10-77)

(7) Property used for scientific, educational, literary, historical, charitable or open space land preservation purposes. Exception. (A) Subject to the provisions of sections 12-87 and 12-88, the real property of, or held in trust for, a corporation organized exclusively for scientific, educational, literary, historical or charitable purposes or for two or more such purposes and used exclusively for carrying out one or more of such purposes or for the purpose of preserving open space land, as defined in section 12-107b, for any of the uses specified in said section, that is owned by any such corporation, and the personal property of, or held in trust for, any such corporation, provided (i) any officer, member or employee thereof does not receive or at any future time shall not receive any pecuniary profit from the operations thereof, except reasonable compensation for services in effecting one or more of such purposes or as proper beneficiary of its strictly charitable purposes, and (ii) in 1965, and quadrennially thereafter, a statement shall be filed on or before the first day of November with the assessor or board of assessors of any town, consolidated town and city or consolidated town and borough, in which any of its property claimed to be exempt is situated. Such statement shall be filed on a form provided by such assessor or board of assessors. The real property shall be eligible for the exemption regardless of whether it is used by another corporation organized exclusively for scientific, educational, literary, historical or charitable purposes or for two or more such purposes;

(B) On and after July 1, 1967, housing subsidized, in whole or in part, by federal, state or local government and housing for persons or families of low and moderate income shall not constitute a charitable purpose under this section. As used in this subdivision, “housing” shall not include real property used for temporary housing belonging to, or held in trust for, any corporation organized exclusively for charitable purposes and exempt from taxation for federal income tax purposes, the primary use of which property is one or more of the following: (i) An orphanage; (ii) a drug or alcohol treatment or rehabilitation facility; (iii) housing for homeless individuals, mentally or physically handicapped individuals or persons with intellectual disability, or for victims of domestic violence; (iv) housing for ex-offenders or for individuals participating in a program sponsored by the state Department of Correction or Judicial Branch; and (v) short-term housing operated by a charitable organization where the average length of stay is less than six months. The operation of such housing, including the receipt of any rental payments, by such charitable organization shall be deemed to be an exclusively charitable purpose;

Sec. 12-89. Assessors to determine exemptions. The board of assessors of each town, consolidated town and city or consolidated town and borough shall inspect the statements filed with it and required by sections 12-81 and 12-87 from scientific, educational, literary, historical, charitable, agricultural and cemetery organizations, shall determine what part, if any, of the property claimed to be exempt by the organization shall be in fact exempt and shall place a valuation upon all such property, if any, as is found to be taxable, provided any property acquired by any tax-exempt organization after the first day of October shall first become exempt on the assessment date next succeeding the date of acquisition. Any organization filing a tax-exempt statement, aggrieved at the action of the assessor or board of assessors, may appeal, within the time prescribed by law for such appeals, to the board of assessment appeals. Any such organization claiming to be aggrieved by the action of the board of assessment appeals may, within two months from the time of such action, make application in the nature of an appeal therefrom to the superior court for the judicial district in which such property is situated.