(1)
Introduction. This rule explains the property tax exemption
available under the provisions of
RCW
84.36.060(1)(b) to
organizations, associations, or corporations engaged in the production and
performance of musical, dance, artistic, dramatic, or literary works.
(2)Definitions. For purposes of
this section, the following definitions apply:
(a) "Governmental entity" means any political
unit or division of the federal, state, county, city, or municipal
government.
(b) "Property" means
all real and personal property exclusively used to produce or perform musical,
dance, artistic, dramatic, or literary works.
(3)Exemption. All real and
personal property owned by or leased to a nonprofit organization, association,
or corporation engaged in the production and performance of musical, dance,
artistic, dramatic, or literary works for the benefit of the general public and
not for profit will be exempt from taxation under the following conditions:
(a)The property must be used exclusively to
produce or perform musical, dance, artistic, dramatic, or literary
works.
(b)An organization,
association, or corporation must be organized and operated exclusively for
musical, dance, artistic, dramatic, literary, or educational
purposes.
(c) The organization,
association, or corporation organized and operated for musical, dance,
artistic, dramatic, literary, or educational purposes must receive a
substantial portion of its income from a governmental entity or from direct or
indirect contributions of money, real or personal property, or services from
the general public. Admission or entrance fees derived from producing or
performing musical, dance, artistic, dramatic, literary, or educational works
will not be included within the figures used to calculate "a substantial part"
of the organization's, association's or corporation's income.
(i) For example, a theater may receive
support from a city government and from donations made by the general public in
addition to ticket sales for admission to its performances. When determining
whether the theater receives a substantial part of its income from a
governmental entity or through contributions from the general public, the
ticket sales may not be considered as contributions from the general
public.
(ii) Any organization,
association, or corporation that relies on services donated by the general
public for a substantial portion of its support must maintain records
identifying the individuals who donate their services and the number of hours
they donate. The value of donated time will be calculated by using the federal
minimum wage standard.
(4)
Exemption for property under
construction or soon to be used for an exempt purpose. Property that is
being constructed, remodeled, or otherwise prepared to be used by
organizations, associations, or corporations engaged in the production and
performance of musical, dance, artistic, dramatic, literary, or educational
works, may qualify for exemption under certain circumstances. A nonprofit
organization, association, or corporation seeking an exemption for property not
currently being used for an exempt purpose, may qualify if the property will be
used for an exempt purpose within a reasonable period of time and proof is
submitted that a reasonably specific and active program is being carried out to
enable the property to be used by organizations, associations, or corporations
engaged in the production and performance of musical, dance, artistic,
dramatic, literary, or educational works.
(a)Acceptable proof of a specific and active
building or remodeling program must include, but is not limited to, the
following items:
(i) Affirmative action by the
board of directors, trustees, or governing body of the nonprofit organization,
association, or corporation endorsing and underwriting the construction or
remodeling;
(ii) Itemized reasons
for the proposed construction or remodeling;
(iii) Clearly established plans for financing
the construction or remodeling; and
(iv) Building permits necessary to begin or
continue the construction or remodeling.
(b)Property under construction will not
qualify for exemption during this interim period if the property is used by,
loaned to, or rented to a for-profit organization or business
enterprise.
(5)
Additional requirements. Any organization, association, or
corporation applying for a property tax exemption under this rule must also
comply with the provisions of WAC
458-16-165. WAC
458-16-165 provides additional
conditions and requirements that must be complied with to obtain a property tax
exemption pursuant to
RCW
84.36.060.