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About Harvey Mechanic
Expertise
US Federal tax issues of nonprofit 501(c)(3) public charities only. Establishing and maintaining legal requirements for such non-profit organizations in the United States, including Internal Revenue service filings and requirements. I will not be working on this free forum to answer questions about Nonprofit's unrelated or for-profit businesses or how to fill out forms. This forum is only for general questions about federal tax law, not as the law applies to your specific situation. To search my previous answers you can do a Google search:
site:allexperts.com/q/nonprofit
[with your other search terms appended].

Experience
I have been practicing law and especially the law of nonprofit organizations since 1990 when I was admitted to the New York Bar.

Education/Credentials
B.S. Columbia University in New York City, 1970

J.D. (Law Degree) Brooklyn Law School, 1990 -- Cum Laude

You are here: Experts > Real Estate > Tax Planning: U.S. > Nonprofit Law > RE Tax reimbursment for a NPO

Nonprofit Law - RE Tax reimbursment for a NPO

Expert: Harvey Mechanic - 11/6/2009

Question
QUESTION: We have a non-profit educational organization. We are operating in a leased building. We use 100% of the building. According to our lease agreement with the owner we are paying to landlord our agreed rent plus 100% of RE tax, School Tax and County Taxes of the building. I have a question: Can a non-profit organisation reimburse the Real Estate, County and School Taxes or not?

Thanks,
BS

ANSWER: I have in my profile that this free forum is only for relevant IRS federal exemption issues of 501(c)(3) organizations. Your issues are controlled by state law and states may differ somewhat with how they would treat such issues. I suggest that you check with your state law (I can direct you, if you wish), but generally states have no prohibition on nonprofits paying landlords for amounts for Real estate and school taxes and any other of what is referred to, in commercial real estate as "triple net".
http://en.wikipedia.org/wiki/Net_lease

Harvey Mechanic, Attorney at Law -
Harvey108@hotmail.com

---------- FOLLOW-UP ----------

QUESTION: Yes we have 501 (c)(3) and we are located in PA.
Can we get back all RE Taxes we payed on behalf of building owner?
Thanks,
BS

Answer
Counties sometimes allow real property exemption based upon use and not ownership and that is what you would check with the County tax assessor office. "The state of Pennsylvania does not levy or collect taxes on real estate or personal property. Instead, those taxes are reserved for the local governments - counties, municipalities and school districts. In most areas of Pennsylvania all three groups will levy real estate or property taxes - with rates differing depending upon the county, school district and municipality in which you live."
from top of http://bit.ly/1CwjXt

Those exemptions are usually applied for annually and they are not retroactive.

Harvey Mechanic, Attorney at Law -
Harvey108@hotmail.com

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