A charitable organization for property tax exemption purposes (Mass General Laws Chapter 59, Section 5, Clause 3) 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.
A charitable organization is exempt from local taxation on:
All personal property it owns regardless of use. 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. 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.
An organization seeking a charitable exemption for personal property or a particular parcel of real property must make an initial application Form 1B-3 (Clause 3 Charitable Property Tax Exemption Form) to the Board of Assessors. 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). Once a tax bill is issued, the organization must file a timely application for the assessors to grant any exemption for which it qualifies.
Annual Filing - Form 3ABC
Every charitable organization owning property on January 1 must file a property return Form 3ABC (Property Held for Charitable Purposes Form) 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. The latest date the filing deadline can be extended is 30 days after the mailing of the tax bills for the fiscal year. Failure to file timely bars the organization from exemption for that year.
If you have any questions, please contact the Assessors’ Office (978-887-1514).