F.E. “Tripp” Isenhour, III, County Attorney
State code allows localities to pass ordinances exempting real or personal property owned by non-profit organizations at Va. Code Ann. §58.1-3651. The State Code requires that the Board of Supervisors conduct a public hearing prior to exempting any property, real or personal, and defines a list of factors the Board must consider in reviewing an application for an exemption.
Under state law, the organization must meet two basic benchmarks: the property proposed to be exempted must be used for a religious, charitable, patriotic, historical, benevolent, cultural, or public park and playground purpose, and the organization may not unlawfully discriminate on the basis of religious conviction, race, color, sex, or national origin. Next, the Board may consider granting the request after considering eight (8) factors, set forth in Virginia Code section 58.1-3651, stated below, with information provided by the petitioner:
1. Whether the organization is exempt from taxation pursuant to § 501(c) of the Internal Revenue Code of 1954;
2. Whether a current annual alcoholic beverage license for serving alcoholic beverages has been issued by the Virginia Alcoholic Beverage Control Board to such organization, for use on such property;
3. Whether any director, officer, or employee of the organization is paid compensation in excess of a reasonable allowance for salaries or other compensation for personal services which such director, officer, or employee actually renders;
4. Whether any part of the net earnings of such organization inures to the benefit of any individual, and whether any significant portion of the service provided by such organization is generated by funds received from donation, contributions, or local, state or federal grants. As used in this subsection, donations shall include the providing of personal services or the contribution of in-kind or other material services;
5. Whether the organization provides services for the common good of the public;
6. Whether a substantial part of the activities of the organization involves carrying on propaganda, or otherwise attempting to influence legislation and whether the organization participates in, or intervenes in, any political campaign on behalf of any candidate for public office;
7. The revenue impact to the locality and its taxpayers of exempting the property; and
8. Any other criteria, facts and circumstances that the governing body deems pertinent to the adoption of such ordinance.
Additionally, the Board’s adopted policy requires that the petitioner provide:
• Evidence that the petitioner’s services provide direct financial benefit to the County by reducing costs for services that the County uses or provides funding for OR that the petitioner is a nationally recognized charitable organization in good standing.
Susan Arthur, Treasurer of Rustburg Dixie Softball, Inc., submitted the petition for that organization on April 26, 2023, has provided information for use in the evaluation of the above factors, and has agreed to pay for and submitted its request to a public hearing.
RECOMMENDATION: Staff recommends the Board hold the required public hearing and determine, based on the factors outlined in the statute, whether Rustburg Dixie Softball, Inc. should be entitled to be exempt from county real estate tax. A personal property tax exemption has not been requested.