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Frequently Asked Questions on Exemptions
Why do I have to apply for an exemption?
Property is always assumed taxable until proven otherwise. To receive an exemption from ad valorem taxes Minnesota state law (MN Statute 272.025, subd 1) mandates that you apply. The Ramsey County Assessor must also keep up-to-date records of exempt property in the county. A “Standard Application” is typically used for organizations such as churches, hospitals, government agencies, a separate application is filed for “Institutions of Purely Public Charities,” and another for “Nursing Homes.”
When should I apply?
First-time applicants should send their exempt application and supportive documents to the Ramsey County Assessor for approval as soon as possible after a property is acquired by a potential exempt organization.
When will my exemption become effective?
Ownership and use must be established prior to July 1 of the current year in order for the property to be exempt from taxes payable the next year. The exemption does not apply for taxes payable in the year in which the property is acquired. All taxes payable in the current year will be due and payable and there is no prorated or partial exemption of yearly taxes.
If the property is purchased after June 30 of the current year, the exempt class does not become effective until the following assessed year. For example, a property acquired after June 30, 2014, becomes exempt for the 2015 assessment for taxes payable in 2016.
How much does Ramsey County charge to file an exempt application?
Ramsey County does not charge to file an exempt application.
Can I appeal a denied exempt request?
Yes. There are a couple options to appeal a decision by the assessor’s office to deny an exemption.
- The Review Board for Institutions of Purely Public Charity, Minnesota Deptartment of Revenue. The board reviews your circumstance and issues a written response as to whether all required qualifications are met to award a property exemption. The board’s opinion is non-binding and not able to formally grant or deny an exemption, however it will be carefully considered by the assessor in their determination to award or deny a property exemption. The board will not address a request for an opinion if the exemption is under an official appeal through the court system. There is no cost for the Advisory Board to review your exempt request. A request to the board may be made by written request to:
Department of Revenue
Property Tax Division, Information and Education Section
Mail Station 3340
Saint Paul, MN 55146
- Minnesota Tax Court: The Minnesota Tax Court is the only authority eligible to make exempt determinations, which must be acted upon by the assessor. Applicants may appeal its tax exempt status through the court system. The deadline to appeal to the Minnesota Tax Court is April 30th of the year in which the taxes become payable.
Can my property lose its exempt status?
Yes. There are four primary ways that your property can lose its exempt status in any given year:
- The property is sold to an owner who does not qualify for a property exemption.
- The property owner loses their status as a “qualifying exempt owner.”
- The property ceases to be used exclusively for exempt purposes.
- The property is leased to a non-qualifying tenant.
Effective dates to remember when a loss of exemption occurs:
- If the exemption is removed prior to July 1 of the current year, the taxable class will begin for the current year for taxes payable the following year.
- If the exemption is removed after June 30 of the current year, the taxable class begins the following assessed year for taxes payable the year after.
Ownership and tenant issues
- Private owner leasing to an exempt tenant: Property exemptions are based on ownership and use. A private owner cannot qualify for a property exemption even though the tenant is a qualified exempt entity.
- Exempt owner leasing to exempt tenant: The exempt tenant must submit an exempt application and supportive documents to qualify for an exemption on the space they occupy.
- Exempt owner leasing to a private business: The tenant cannot qualify for an exemption from property taxes and their space will be considered taxable.