Critical Tax Exemption for Georgia Nonprofits Affirmed by Supreme Court Decision

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Today, Georgia nonprofits owning property and earning revenue through rentals or other income producing activities can relax for a moment. Yesterday's Georgia Supreme Court issued a precedent-setting decision reversing a prior ruling that would have eliminated the property tax exemption for a local nonprofit, who rents its facility to raise funds for mental health services. The Georgia Center for Nonprofits, as the leading advocate for our state's nonprofit sector, has been hard at work since the issue arose back in 2009, advocating for the nonprofit and responding to the broader threat to nonprofits statewide.

In these economic times, when nonprofits are being urged to diversify funding streams and are struggling to meet rising needs, we celebrate this decision

Today, Georgia nonprofits owning property and earning revenue through rentals or other income producing activities can relax for a moment. Yesterday's Georgia Supreme Court issued a precedent-setting decision reversing a ruling by the Athens Clarke County Board of Tax Assessors that would have eliminated the property tax exemption for a small area nonprofit, Nuci's Space, who rents its facility to raise funds for mental health services. (Athens-Clarke County Bd. of Tax Assessors v. Nuci Phillips Memorial Foundation, 300 Ga. App. 754 (686 SE2d 371) (2009)).

The Georgia Center for Nonprofits, as the leading advocate for our state's nonprofit sector, has been hard at work since the issue arose back in 2009, advocating for member Nuci's Space and responding to the broader threat to nonprofits statewide. The organization has championed the protection of the nonprofit tax exemption by writing and financially supporting briefs to the court and convening leaders around the issue.

"In these economic times, when nonprofits are being urged to diversify funding streams and are struggling to meet rising needs, we celebrate this decision," said Karen Beavor, President and CEO of the Georgia Center for Nonprofits.

Beavor cautions however that Georgia nonprofits must remain on alert, noting that "this case would have, if lost, opened the door to a sweeping loss of property tax exemption throughout the state for those organizations that own property and have a revenue generating activity on that property. Literally millions of charitable dollars that would have otherwise gone to cause related activity would have been redirected to local government tax payments."

This seemingly small, local issue threatened reality to change the definition of what is charitable in the state. The case of Nuci Phillips Memorial Foundation, Inc. v. Athens Clarke County Board of Tax Assessors challenged Nuci's fitness in meeting the definition of "charitable" as it is defined in the Georgia tax code. The favorable decision by the Supreme Court offers a reprieve, and also served to clarify the interpretation of the code relative to the use of nonprofit property for revenue generation in charities.

The Georgia Center for Nonprofits urges every Georgia nonprofit who currently owns property to read the court's decision in this matter and apprise your board. If previously denied an exemption, this decision offers a strong argument for exemption.

Learn more about this critical issue and the ongoing work of the Georgia Center for Nonprofits to support and protect our state's nonprofit sector at http://www.gcn.org

About the Georgia Center for Nonprofits
Over the past 20 years, the Georgia Center for Nonprofits has become a leading state nonprofit organization through its work to improve the quality of life in our communities and across our state by helping to create higher-performing nonprofits. GCN magnifies nonprofit impact in powerful ways--through training, networking, knowledge sharing, advocacy, and collaborations.

As the leading advocate for Georgia's nonprofit sector, GCN helps policy-makers and the public understand and support the work of nonprofits. We develop effective nonprofit leaders and professionals through our Nonprofit University programs and training workshops, and we encourage knowledge sharing and collaboration with year round learning and networking events. We promote partnerships between nonprofits and foundations, businesses, and government to meet critical needs. We also provide expert consulting services to help organizations build capacity. Learn more at http://www.gcn.org.

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