Nebraska Charities, Will Your Property Be Exempt in 2024?

Nebraska Charities, Will Your Property Be Exempt In 2024?

_{Rembolt Ludtke Nonprofit & Tax Exempt Organizations Practice Group}

_{Kurth Brashear}

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As 2023 comes to a close, there is a critical “to do” for Nebraska nonprofit organizations – making sure their real and personal property, if eligible, is exempt from taxation in 2024.

All real and personal property in Nebraska is subject to taxation unless it is exempt from property tax. The exemption, however, for charities and similar organizations is permissive, not automatic, which means an eligible organization must file with the County Assessor by December 31^st to have property be exempt for the following year.

Nebraska law limits eligibility for property tax exemptions to certain organizations. Generally, applicants must be an agricultural or horticultural society or an educational, religious, charitable, or cemetery organization and the property the exemption is being sought for must be used “exclusively” for one or more of those purposes. In addition, the property must not be used for financial gain or profit, must not be used for the sale of alcoholic beverages for more than 20 hours per week, and must not be owned or used by an organization that discriminates in membership or employment based on race, color, or national origin.

Some aspects worth noting:

• If the same organization owns and uses the property at issue, it must meet all the exemption requirements.  If different organizations own and use the property, the applying organization must meet the applicable exemption requirements and the property must be used exclusively for eligible purposes.
• There is no blanket application.  An eligible organization must file an exemption application for each real property parcel in every county in which it owns property.
• Being recognized as a 501(c)(3) exempt organization is not determinative for purposes of property tax exemption in Nebraska.  
• Religious organizations, including houses of worship, must apply to receive the property tax exemption in Nebraska.  This is in contrast to almost every other aspect of religious organizations’ exempt status, which is typically presumed and not applied for.

Exemption applications, known as Form 451, must be filed with the County Assessor for every year divisible by four, such as 2024.  (For years not divisible by four, are affirmation of exempt use, known as Form 451A, is filed.)  While an eligible organization can still apply through June 30^th, it will be assessed a penalty for each month it misses the December 31 deadline. Failure to file by June 30 is a waiver of the exemption for the corresponding year.  

So, what does this mean for these last days of 2023?

Well, there’s good news if your organization has not filed yet.  Because December 31, 2023 is a Sunday, and January 1, 2024 is a holiday, Form 451 applications must be submitted to the County Assessor by January 2, 2024.  If the application is submitted by mail, it must be postmarked by January 2, 2024 (word to the wise:  do not mail it now, deliver it directly to the County Assessor).

• If your organization’s property was exempt from property tax in 2023, be sure to file Form 451 for 2024.
• If your organization’s primary use of exempt property changed in 2023, provide a description of the new primary use on Form451.
• If your organization acquired property in 2023that it is using for an eligible use, file Form 451.
• If you are reading this on January 3, 2024 and did not file your Form 451, do it now.

Finally, make sure to calendar filing of Form 451 or Form451A by December 31 of each year going forward for your peace of mind.

The Rembolt Ludtke Nonprofit & Tax Exempt Organizations team is ready to assist your organization carry out its mission in 2024.  Let us know how we may help.

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This article is provided for general information purposes only and should not be construed as legal advice. Those requiring legal advice are encouraged to consult with their attorney.