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The 2008 Legislature amended the law to allow a new classification, 4C(3)(ii), for community Service Organizations such as VFWs, Elks, American Legions, Knights of Columbus and other similar organizations. The change expands the 4c property classification for nonprofit community service-oriented organizations that make charitable contributions and donations at least equal to the organization's previous year's property taxes and that allow the property to be used for public and community meetings or events at no charge, as appropriate to the size of the facility.
This portion of class 4c will have a class rate of 1.5 percent and be subject to the state general tax at the seasonal-recreational rate, which is about half of the commercial-industrial tax rate.
Under current law, real property up to a maximum of one acre that is owned by a nonprofit community service-oriented organization qualifies for class 4c if the property is not used for revenue producing activity for more than six days in the calendar year preceding the year of the assessment. A new, second option, extends the maximum land size to 3 acres, primarily to allow for parking lots, ball fields, etc.
Who is Eligible
Property may qualify for class 4c(3)(ii) and the corresponding class rate if:
- it is owned by a "nonprofit community service oriented organization"
- it is not used for residential purposes on either a temporary or permanent basis
- the organization makes annual charitable contributions and donations at least equal to the property's previous year's property taxes (excluding the state general tax)
- the property is allowed to be used for public and community meetings or events free of charge
A "nonprofit community service oriented organization" is defined as any corporation, society, association, foundation, or institution organized and operated exclusively for charitable, religious, fraternal, civic, or educational purposes, and which is exempt from federal income taxation pursuant to section 501(c)(3), (10), or (19) of the Internal Revenue Code of 1986, as amended through December 31, 1990.
For the purposes of filling out Form LG1010 and Form LP1010-DR below, "charitable contributions and donations" are defined as having the same meaning as lawful gambling purposes under Minnesota Statute, section 349.12, subd. 25, excluding those purposes relating to the payment of taxes, assessments, fees, auditing costs, and utility payments.
On Form LG1010, charitable contributions are defined as expenditures coded A-1 to A-7, A-10, A-11, A-13, A-14, A-15, and A-19. Only expenditures with these codes qualify as charitable contributions when the county assessor determines if an organization has made charitable contributions in an amount equal to the previous year's property tax.
Form LP1010-DR was created for organizations that do not raise money from gambling, therefore are not required to complete the Gambling Control Board's Form LG1010. The form mimics Form LG1010, but it does not reference the Gambling Control Board or charitable gambling.
Property Taxes - for the purpose of this subdivision, the term does not include the state general tax.
Revenue-producing activities - includes but are not limited to property or that portion of a property that is used as an on-sale intoxicating liquor or 3.2 percent malt liquor establishment licensed under chapter 340A, a restaurant open to the public, bowling alley, a retail store, gambling conducted by organizations licensed under chapter 349, an insurance business, or office or other space leased or rented to a lessee who conducts a for-profit enterprise on the premises.
Examples of qualifying "public and community" groups that must be allowed to hold events free of charge would include:
- Neighborhood groups
- Athletic Associations
- Other non-profit organizations that are involved in educational, social service, or other public programs that are "beneficial" to the community
- Public meetings sponsored by governmental departments, agencies, or commissions
- Youth groups'
- Religious/faith organizations
- School groups
Any private events and certain other groups/activities can be charged a fee to utilize a 4c(3)(ii) organization's facilities. Examples of private events/groups that can be charged a fee to use a 4c(3)(ii) organization's facilities are:
- Family Reunions
- Private parties (office holiday parties, family and individual parties, etc.)
- For-profit organizations
How do I Apply?
- Complete the entire application** fully and legibly.
- Attach the required documentation.
Mail the application and the required documentation to the Ramsey County Assessor (P.O. Box 64097, St. Paul, MN 55164-0097) by May 1.
**Applications must be completed annually.
Which Form do I File?
If your organization raises money through lawful gambling, file Form LG1010.
If your organization does not raise money from lawful gambling, file Form LP1010-DR.
You must make certain your organization's contributions have gone towards a qualifying "lawful gambling purpose" or "A-code expenditures."
Qualifying A-codes include: A-1 to A-7, A-10, A-11, A-13, A-14, A-15, A-19.
- A copy of the property's previous year's property tax statement
- Form LG1010 Schedule C/D or Form LP1010-DR showing the previous year's charitable contributions and donations
- At a minimum you must provide copies of the Form LG1010's that are used to demonstrate that the organization's charitable contribution amount is equal to the property's previous year's property tax.
For example, if it took three months for the charitable contribution amount to equal the previous year's property tax, only those three Form LG1010's would need to be attached to the application.
Note: Not all expenditures on the Form LG1010 qualify as charitable contributions.
Request by Assessor
The county assessor may request that an organization provide the following additional information, at any time, to ensure eligibility:
- A copy of an IRS letter granting exempt status as a 501(c)(3) corporation or an explanation of why the letter is not available
- Records of an organization's charitable contributions and donations
- Records of public meetings and events held on the property
Use of Information
Some of the information contained on this form may be shared with the County Assessor, County Attorney, the Commissioner of Revenue or other federal, state, or local taxing authorities to verify your eligibility.
You do not have to provide this information. However, refusal will disqualify you from consideration for the 4c(3)(ii) classification.
Making false statements on this application is against the law. Minnesota Statute, section 609.41 states that anyone giving false information in order to avoid or reduce their tax obligations is subject to a fine of up to $3,000 and/or up to one year in prison.