By: Kandy Wischmeier, CPA, Tax Manager at Blue & Co.
If your not-for-profit organization is located in Indiana and has had a significant change in the use of property, has moved in the last year, or is a new entity, you may be required to file Form 136, Application for Property Tax Exemption.
Entities are not automatically exempt from Indiana property taxes if they are exempt for income tax purposes. Federal and/or state income tax exemption does not entitle an organization to a property tax exemption.
Indiana code exempts tangible personal property and real property from property tax for charitable, educational, and religious purposes. Form 136 must be filed to obtain this property tax exemption.
Applying for Exemption
To obtain an exemption, Indiana Form 136 must be filed with the County Assessor by April 1 of the assessment year. There is no fee to apply for this exemption.
Once an entity’s Form 136 is approved, it does not need to be re-filed as long as the property continues to meet the requirements of IC 6-1.1-0-16, IC 6-1.1-10-21 (for religious organizations), or IC 6-1.1-10-24 (for sororities and fraternities).
Compliance Requirements After Property Tax Exemption is Received
If there has been a change in the use of the property or the location of the property, Form 136 must be re-filed.
Organizations that have obtained property tax exemption may still be required to file Forms 103 and 104 annually for tangible personal property.
$80,000 Property Tax Exemption
If the cost of all the entity’s business personal property within a county is less than $80,000, then the entity can simply complete the section at the top of Form 103 indicating they are exempt from property taxes and file Form 103 along with Form 104 for the year.
Organizations are not required to file Forms 103 and 104 in future years unless the cost of the property within a county exceeds the $80,000 exclusion amount.
If you have any questions about applying for the Indiana Property Tax Exemption or about your not-for-profit’s qualifications, please contact a Blue & Co. advisor today.