Present law exempts from property taxation the property of fraternal organizations exempted from the payment of federal income taxes by the United States Internal Revenue Code, to the extent that such property is used not for revenue-producing profit, but directly, physically, and exclusively for religious, charitable, scientific, and educational activities.
This bill provides that in Knox County or within a municipality located within Knox County, if a charitable nonprofit corporation acquires property for use as a licensed residential home for the aged to replace its own exempt property that was used as a licensed residential home for the aged, then the charitable nonprofit corporation may claim and file an application for exemption under the present law, and the effective date of exemption is up to three years prior to the date of application, or the date the corporation began to use the property for exempt purposes, whichever is later.
This bill also provides that, in determining the date that a qualifying corporation begins using property for an exempt purpose, the present law described above applies to the full extent of both improvements and underlying real property so that the entire property, to the extent that the full value of underlying land and any improvements thereon, is considered to be occupied and used by the qualifying corporation or its officers purely and exclusively for the corporation's purposes from and after the commencement of construction of improvements.
This bill applies to properties acquired before the effective date of this bill, so that the properties are not subject to property taxes while owned by the qualifying corporation and used for one or more of the exempt purposes for which the corporation was created or exists. This bill requires any property taxes paid on the property that were collected prior to the effective date of this bill to be refunded.
ON APRIL 15, 2024, THE SENATE ADOPTED AMENDMENT #1 AND PASSED SENATE BILL 1882, AS AMENDED.
AMENDMENT #1 revises the provision in the bill providing that this bill applies to properties acquired before the effective date of this bill, so that the properties are not subject to property taxes while owned by the qualifying corporation and used for one or more of the exempt purposes for which the corporation was created or exists and any property taxes paid on the property that were collected prior to the effective date of this bill must be refunded by also requiring any interest, fees, penalties, postage, expenses, and all other related costs paid on the property that were collected prior to the effective date of this act to be refunded.

Statutes affected:
Introduced: 67-5-212(b)(3), 67-5-212