Nonprofit Exemptions

Form with hand and pencil
  2. Frequently Asked Questions

Under section 4(b) of article XIII of the California Constitution, and section 214of the California Revenue and Taxation (R&T) Code the Legislature has the authority to exempt property (1) used exclusively for religious, hospital, scientific or charitable purposes and (2) owned or held in trust by charitable nonprofit organizations operating for those purposes.
Under new claim administration guidelines, amended January 1, 2004, by Senate Bill 1059, an organization filing for the first time must submit to the State Board of Equalization (BOE) a claim form that includes the following:

  • An IRS 501 (c)(3) or Franchise Tax Board 23701(d) letter of determination.
  • Articles of Incorporation and all amendments certified by the California Secretary of State.
  • Copies of financial statements for the years claimed.

If the BOE determines that an organization qualifies, the BOE will issue an Organizational Clearance Certificate to the organization. A copy of the Organizational Clearance Certificate can then be filed with claim forms in any of the 58 counties in the state of California.

The Assessor determines whether the use of the property is eligible for the exemption. Any use for a thrift or retail store, exclusively for fund raising, shared or exclusive use other than incidental by an individual or for-profit entity would not be exempt.