March 09, 2016

No Joke: Indiana Real and Personal Property Tax Exemption Applications Due April 1

This is no April Fools’ Day joke. Indiana property tax exemption applications for 2016 are due on or by April 1 — six weeks earlier than in previous years. If an exemption application is not properly and timely filed, the owner risks waiving the exemption, resulting in a property tax liability due and payable the following year. Do not assume that property owned by a nonprofit is automatically exempt. Nonprofits are often (but not always) eligible for an exemption. Under the most common provision, real or personal property (such as furniture and fixtures, computers, and equipment) qualifies for exemption if it is owned, occupied and predominantly used for a charitable, educational, religious, literary or scientific purpose. An exemption also extends to property owned by an Indiana nonprofit corporation which is organized and operated for the primary purpose of coordinating, promoting, encouraging, housing or providing financial support to activities in the field of fine arts. Also qualifying for exemption is property owned or held in trust for the use of a church or religious society for worship or as a parsonage, as well as the associated land. Property owned and used by fraternities and sororities may also be exempt.

An exemption for real or personal property can be claimed by the owner using a Form 136 petition that is filed with the county assessor of the county in which the property is located. In requesting an exemption, the owner must describe how the property is used to further an exempt purpose. Depending on the facts, the exemption may carry forward from a previous year, in which case the owner of exempt property may not have to refile. However, such a determination is fact-sensitive and should only be made on a case-by-case basis. If the exemption application is required but is not filed, or is filed late, the exemption may be waived, and the owner’s only viable recourse may be a legislative solution, which can never be guaranteed.

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