The Philadelphia Office of Property Assessment (OPA) has begun mailing notices to each owner of property listed as tax exempt on the OPA’s records indicating that the owner must file a form to certify that the property continues to be entitled to exemption. The notice and form are confusing as they list different due dates and effective dates for the certification. The OPA has confirmed that the due date for filing the form is March 31, 2015 and that the certification of exemption is for tax year 2016.
The certification of continued entitlement to exemption is required under an ordinance passed by City Council back in 2013 and is by ordinance meant to be an annual requirement for every exempt property. Every tax exempt property owner must file the certification form with the OPA, even if they did not receive a notice and certification form. Failure to timely file the certification form will result in the OPA being able to revoke the property’s exempt status effective for tax year 2016.
Although the notice from the OPA purports to be merely a request for certification of the property’s continued entitlement to exemption, the form required to be filed for each property is actually the same application for exemption that has to be initially filed to obtain an exemption. The form requires the owner to provide a description of how the property is used, whether it is used by the owner or others, and whether the owner receives any rents, fees, income or other revenue from the property. The answers provided to these questions are of paramount importance to the property’s continued entitlement to exemption; thus, we recommend that no property owner complete the certification form without obtaining advice from legal counsel familiar with the process and requirements.
The form also requires that the owner attach the following documentation to the form:
- The property owner’s articles of incorporation and bylaws, as amended
- The property owner’s IRS letter of determination of exemption under IRC Section 501(c)(3)
- The property owner’s most recent income and expense statements and balance sheet, which is generally satisfied through the submission of audited financial statements (if available)
- The property owner’s most recently filed federal Form 990
- A statement of any fundraising activities conducted by the owner
- If the property is leased to others, a copy of each lease between the property owner and the lessee
- A copy of the recorded deed by which the property owner acquired the property
A property owner that owns more than one tax-exempt property must file a separate certification form for each property and provide the requested property specific documentation for each property. However, the property owner need provide only a single set of its organizational documents, IRS determination letter and financial documents. If the property owner is unable to gather all of the required documentation by March 31, 2015, it must still timely file the completed form and provide the documentation available at that time, along with a statement that remaining documentation will be provided as soon as it becomes available.