Massachusetts Department of Revenue
Division of Local Services
Property Tax Bureau
Taxpayer's Guide to Property Tax
Exemptions in
Massachusetts
Prepared in conjunction with the
Massachusetts Association of Assessing Officers
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In Massachusetts, the property tax is assessed by
cities and towns to fund local services. Localities
operate on a fiscal year that begins on July 1 and ends of June 30.
Taxes are assessed as of the January 1 before the beginning of the fiscal
year to the owner of record on that date. Taxes
are a single liability payable in two or four installments during the fiscal
year depending on the type of payment system the locality uses.
Institutions and organizations, such as hospitals,
schools, churches and cultural institutions, may qualify for an exemption from
local taxes on real and personal property they own. Ownership does not automatically entitle an organization to
an exemption, however. This
brochure explains the general criteria that must be met and procedures that must
be followed for an exemption to be granted.
The Board of Assessors in each city or town is responsible for administering property tax exemptions. Exemptions are granted by the Assessors according to Massachusetts law.
Qualification
Date
Exemption status is determined as of July 1, which is the first day of the local fiscal year. An organization must meet all eligibility requirements as of July 1 to receive an exemption from taxes for that year. Exemption from taxation is a privilege and the organization must prove clearly and unequivocally that it qualifies.
Religious
Organizations
(M.G.L. Ch 59, §5, Clauses 10 and 11)
A religious organization is
exempt from local taxation on:
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All personal property (a) owned by, or (b) held in trust within Massachusetts for use by, the organization for religious or charitable purposes.
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A church or house of religious worship (a) owned by, or held in trust for, the organization and (b) used and occupied for religious services or instruction. The exemption also applies to parking lots and halls used for religious classes and other church activities. Incidental or occasional use for other purposes does not affect the exemption, but any portion regularly leased or occupied for other purposes is taxable.
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A parsonage (a) owned by, or held in irrevocable trust for the exclusive benefit of, the organization, and (b) used and occupied as a residence for clergy.
All other property owned by a religious organization is taxable unless it qualifies for a charitable exemption.
Charitable
Organizations
(M.G.L. Ch
59, §5, Clause 3)
Qualifying
Property – A charitable organization is exempt from local taxation on:
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All personal property it owns regardless of use.
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Real estate (a) owned by, or held in trust for, the organization, and (b) occupied by the organization, or its officers, for its charitable purposes, or by another charity, or its officers, for its charitable purposes.
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Real estate bought by the organization with the intention of future charitable use. The property need not be occupied immediately. However, if it is not occupied for charitable use within two years of the acquisition, it becomes taxable until put to such use.
All other real
estate owned by a charitable organization is taxable.
This includes property (a) leased to individuals and non-charitable
entities, or (b) occupied or used for non-charitable purposes.
In addition,
property owned by a taxable individual or entity remains taxable even if leased
to and occupied by a charity.
Definition of
Charitable Organizations – A charitable organization for property tax exemption purposes is defined as
a corporation, or trust, established for literary, benevolent, charitable, or
temperance purposes. Non-profit
status is not sufficient, nor is exempt status for state or federal tax
purposes. The organization must be
organized for charitable purposes and must actually operate as a public charity.
Its dominant purposes and activities must benefit the public at large,
not just a limited group of people. In
addition, its income and assets cannot be distributed to officers, directors or
shareholders while it operates or when it dissolves, nor used for non-charitable
purposes.
Examples of charitable organizations include non-profit, private schools, colleges, universities, hospitals, museums and cultural facilities. Trade groups, professional associations or social clubs generally do not qualify since they operated primarily for the benefit of their members.
Annual
Filings (M.G.L. Ch 59, §h Clause 3(b) and, §29)
Form 3ABC – Every charitable
organization owning property on January 1 must file a property return (Form
3ABC) with the local Board of Assessors in order to receive an exemption for the
fiscal year that begins on the next July 1. The return must be received in the assessors’ office by
March 1. The Assessors can extend
that deadline if the organization applies and demonstrates a good reason for not
filing on time. An extension cannot
be granted beyond the deadline for filing an abatement application for the
fiscal year (the due date of the first installment payment of the actual, not
preliminary, tax bill). Failure to
file timely bars the organization from exemption for that year.
A religious
organization must file a Form 3ABC only if it is seeking exemption for property
other than a house of worship or parsonage.
Form PC – A true and complete copy of the charitable organization’s most
recent annual report to the Public Charities Division of the Attorney
General’s Office (Form PC) must be attached to the Form 3ABC.
Failure to submit the Form PC also bars the organization from exemption.
Applications
An organization seeking a
charitable exemption for personal property, or a particular parcel of real
property, must make an initial application to the local Board of Assessors.
Once an exemption is established for that property, no further
application is required, provided there is no change in ownership, occupancy or
other eligibility criteria.
Application forms
are available at the assessors’ office.
The organization must provide whatever information is reasonably required
to establish eligibility.
This information may include, but is not limited to:
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Articles of incorporation, charter or declaration of trust.
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Organization by-laws.
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Identification of officers, directors or trustees.
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Description of charitable activities.
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Description of the use of the property, including use by all lessees or other occupants.
The
application must be filed within the same period as abatement applications
for the fiscal year (the due date of the first installment payment of
the actual, not preliminary, tax bill).
Some Boards of Assessors may review
applications and supporting documentation before tax bills are issued.
However, once a tax bill is issued, the organization must file a
A religious
organization does not have to file an application to establish
Filing an
application does not stay the collection of taxes.
To preserve the
The Assessors have three months (unless extended by written consent of the organization) to act on the application. The Assessors must send a notice within 10 days of their decision. If the Assessors do not act within the three months (or extended) period, the application is deemed denied.
The Appellate Tax Board (ATB) is a state administrative body that hears appeals from local Assessors' decisions on property tax exemptions. There is an alternative appeal to the County Commissioners, but Assessors may and usually do transfer the appeal to the ATB.
An organization has three months from the date of the Assessors' decision on an exemption application to appeal to the ATB. If the application was deemed denied, the appeal must be filed within three months of the deemed denied date. The ATB cannot hear an appeal if it is not timely filed. ATB decision may be appealed to the Appeals Court and ultimately, to the Supreme Judicial Court.
For further information, contact your local Board of Assessors, or call:
Department
of Revenue
Division of Local Services
Property Tax Bureau
617.626.2300
(June 1998)