[WSBARP] Property Tax Exemption When Lease to Church?

[John J. Sullivan, Esq.]

Listmates:

 

Any real property tax gurus out there, or tax exempt types who have dealt
with property tax issues?

 

Here's the hypothetical: Landlord who is a non-exempt LLC wishes to lease a
building to a church for use in its church operations. Clearly if the church
owned the property and used it as a church it would be exempt from real
property tax. Everything I've seen before indicates a non-exempt landlord
leasing to a church does not get the exemption. 

But I was shown a form for applying for the exemption that contains this
language:

 

"Generally, ownership by a nonprofit entity is required to qualify for
exemption. However, some statutes allow nonprofit organizations to lease
property and remain eligible for exemption. In these cases the lease must
transfer the responsibility for the property taxes to the nonprofit."

Has anyone dealt with this? What does it even mean? How can you transfer
responsibility to someone who isn't responsible? Will a standard triple net
lease work?

Any ideas?

 

John J. Sullivan

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