Texas Tax Code
Sec. § 11.184
Organizations Engaged Primarily in Performing Charitable Functions


(a)

In this section:

(1)

“Local charitable organization” means an organization that:

(A)

is a chapter, subsidiary, or branch of a statewide charitable organization; and

(B)

with respect to its activities in this state, is engaged primarily in performing functions listed in Section 11.18 (Charitable Organizations)(d).

(2)

“Qualified charitable organization” means a statewide charitable organization or a local charitable organization.

(3)

“Statewide charitable organization” means a statewide organization that, with respect to its activities in this state, is engaged primarily in performing functions listed in Section 11.18 (Charitable Organizations)(d).

(b)

Repealed by Acts 2009, 81st Leg., R.S., Ch. 1137, Sec. 2(b), eff. January 1, 2010.

(c)

A qualified charitable organization is entitled to an exemption from taxation of:

(1)

the buildings and other real property and the tangible personal property that:

(A)

are owned by the organization; and

(B)

except as permitted by Subsection (d), are used exclusively by the organization and other organizations eligible for an exemption from taxation under this section or Section 11.18 (Charitable Organizations); and

(2)

the real property owned by the organization consisting of:

(A)

an incomplete improvement that:

(i)

is under active construction or other physical preparation; and

(ii)

is designed and intended to be used exclusively by the organization and other organizations eligible for an exemption from taxation under this section or Section 11.18 (Charitable Organizations); and

(B)

the land on which the incomplete improvement is located that will be reasonably necessary for the use of the improvement by the organization and other organizations eligible for an exemption from taxation under this section or Section 11.18 (Charitable Organizations).

(d)

Use of exempt property by persons who are not charitable organizations eligible for an exemption from taxation under this section or Section 11.18 (Charitable Organizations) does not result in the loss of an exemption authorized by this section if the use is incidental to use by those charitable organizations and limited to activities that benefit the charitable organization that owns or uses the property.

(e)

Before an organization may submit an application for an exemption under this section, the organization must apply to the comptroller for a determination of whether the organization is engaged primarily in performing functions listed in Section 11.18 (Charitable Organizations)(d) and is eligible for an exemption under this section. In making the determination, the comptroller shall consider:

(1)

whether the organization is recognized by the Internal Revenue Service as a tax-exempt organization under Section 501 of the Internal Revenue Code of 1986;

(2)

whether the organization holds a letter of exemption issued by the comptroller certifying that the organization is entitled to issue an exemption certificate under Section 151.310 (Religious, Educational, and Public Service Organizations);

(3)

whether the charter or bylaws of the organization require charitable work or public service;

(4)

the amount of monetary support contributed or in-kind charitable or public service performed by the organization in proportion to:

(A)

the organization’s operating expenses;

(B)

the amount of dues received by the organization; and

(C)

the taxes imposed on the organization’s property during the preceding year if the property was taxed in that year or, if the property was exempt from taxation in that year, the taxes that would have been imposed on the property if it had not been exempt from taxation; and

(5)

any other factor the comptroller considers relevant.

(f)

Not later than the 30th day after the date the organization submits an application under Subsection (e), the comptroller may request that the organization provide additional information the comptroller determines necessary. Not later than the 90th day after the date the application is submitted or, if applicable, the date the additional information is provided, the comptroller shall issue a letter to the organization stating the comptroller’s determination.

(g)

The comptroller may:

(1)

adopt rules to implement this section;

(2)

prescribe the form of an application for a determination letter under this section; and

(3)

charge an organization a fee not to exceed the administrative costs of processing a request, making a determination, and issuing a determination letter under this section.

(h)

An organization applying for an exemption under this section shall submit with the application a copy of the determination letter issued by the comptroller under Subsection (f). The chief appraiser shall accept the copy of the letter as conclusive evidence as to whether the organization engages primarily in performing charitable functions and is eligible for an exemption under this section.

(i)

A property may not be exempted under Subsection (c)(2) for more than three years.

(j)

For purposes of Subsection (c)(2), an incomplete improvement is under physical preparation if the charitable organization has:

(1)

engaged in architectural or engineering work, soil testing, land clearing activities, or site improvement work necessary for the construction of the improvement; or

(2)

conducted an environmental or land use study relating to the construction of the improvement.

(k)

An exemption under this section expires at the end of the fifth tax year after the year in which the exemption is granted. To continue to receive an exemption under this section after that year, the organization must obtain a new determination letter and reapply for the exemption.

(l)

Notwithstanding the other provisions of this section, a corporation that is not a qualified charitable organization is entitled to an exemption from taxation of property under this section if:

(1)

the corporation is exempt from federal income taxation under Section 501(a), Internal Revenue Code of 1986, by being listed as an exempt entity under Section 501(c)(2) of that code;

(2)

the corporation holds title to the property for, collects income from the property for, and turns over the entire amount of that income, less expenses, to a qualified charitable organization; and

(3)

the qualified charitable organization would qualify for an exemption from taxation of the property under this section if the qualified charitable organization owned the property.

(m)

Before a corporation described by Subsection (l) may submit an application for an exemption under this section, the qualified charitable organization for which the corporation holds title to the property must apply to the comptroller for the determination described by Subsection (e) with regard to the qualified charitable organization. The application for the determination must also include an application to the comptroller for a determination of whether the corporation meets the requirements of Subsections (l)(1) and (2). The corporation shall submit with the application for an exemption under this section a copy of the determination letter issued by the comptroller. The chief appraiser shall accept the copy of the letter as conclusive evidence of the matters described by Subsection (h) as well as of whether the corporation meets the requirements of Subsections (l)(1) and (2).

(n)

Notwithstanding Subsection (k), in order for a corporation to continue to receive an exemption under Subsection (l) after the fifth tax year after the year in which the exemption is granted, the qualified charitable organization for which the corporation holds title to property must obtain a new determination letter and the corporation must reapply for the exemption.
Added by Acts 2001, 77th Leg., ch. 1040, Sec. 1, eff. Sept. 1, 2001. Amended by Acts 2003, 78th Leg., ch. 288, Sec. 1.02, eff. June 18, 2003; Acts 2003, 78th Leg., ch. 288, Sec. 2.02, eff. Jan. 1, 2006.
Amended by:
Acts 2009, 81st Leg., R.S., Ch. 1137 (H.B. 2555), Sec. 2(a), eff. January 1, 2010.
Acts 2009, 81st Leg., R.S., Ch. 1137 (H.B. 2555), Sec. 2(b), eff. January 1, 2010.
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May. 14, 2021