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Joel Purchase?

If we rent, we don't have to take the losses we'd have to take if we buy.
 
TBR said:
Wake does not have to pay property taxes.

This is a fairly significant issue across the country as universities like Wake are becoming involved in property development. Of course that wouldn't be an issue here since obviously taxes aren't be paid on it now, but I suspect we will hear more about it as the university continues to develop Deacon Blvd and the research park. It even comes into play with student housing.
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I had a neighbor complain about Baptist hospital not paying property tax. It was surprisingly difficult to convince her, even given the non-profit status and health/monetary benefit to the area.
 
dot com said:
I had a neighbor complain about Baptist hospital not paying property tax. It was surprisingly difficult to convince her, even given the non-profit status and health/monetary benefit to the area.
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Everyone has stupid neighbors. We have one who led a charge to disband the HOA because she was upset over the $100 annual dues.
 
TBR said:
Wake does not have to pay property taxes.

This is a fairly significant issue across the country as universities like Wake are becoming involved in property development. Of course that wouldn't be an issue here since obviously taxes aren't be paid on it now, but I suspect we will hear more about it as the university continues to develop Deacon Blvd and the research park. It even comes into play with student housing.
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I don't think it is quite that simple. It looks like NC's property tax exemption for educational institutions is restricted to property that is used exclusively for educational purposes. The operation of sports arenas is specifically included within the definition of "educational purpose" under the statute, so the Joel should be fine. However, I would think that a lot of the Deacon Blvd. property is not exempt (and as a matter of tax policy, probably shouldn't be). FWIW, student housing facilities are also specifically included within the definition of educational purpose. Incidentally, it looks like (at least as of 10-12 years ago), we pay property taxes on one-third of the football stadium lot because of the easement granter to RJR for parking and access to their buildings. Kind of interesting.

http://ncinfo.iog.unc.edu/pubs/electronicversions/pdfs/ptb121.pdf
 
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I'm not a lawyer, but if a property is used for commercial purposes, I think that it's taxable, regardless of the tax status of the owner.
 
Wakelaw2006 said:
I don't think it is quite that simple. It looks like NC's property tax exemption for educational institutions is restricted to property that is used exclusively for educational purposes. The operation of sports arenas is specifically included within the definition of "educational purpose" under the statute, so the Joel should be fine. However, I would think that a lot of the Deacon Blvd. property is not exempt (and as a matter of tax policy, probably shouldn't be). FWIW, student housing facilities are also specifically included within the definition of educational purpose. Incidentally, it looks like (at least as of 10-12 years ago), we pay property taxes on one-third of the football stadium lot because of the easement granter to RJR for parking and access to their buildings. Kind of interesting.

http://ncinfo.iog.unc.edu/pubs/electronicversions/pdfs/ptb121.pdf
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Did not know that.

Just checked into out of curiousity and Wake paid $337k in property taxes for the University Corporate Center (it was valued at $29mm) so that definitely checks out.
 
If there was a loophole in the property tax code that would exempt all property owned by nonprofits, every business would declare itself to be a church, school, etc. to avoid paying taxes.
 
Yes, I suppose the owners could extract profits via large salaries and bonuses.
 
DinDC said:
If there was a loophole in the property tax code that would exempt all property owned by nonprofits, every business would declare itself to be a church, school, etc. to avoid paying taxes.
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1) You can't just declare your car wash to be a school or church.
2) Declaring yourself an non-profit isn't really that helpful if your goal is to make a profit.
 
DinDC said:
If there was a loophole in the property tax code that would exempt all property owned by nonprofits, every business would declare itself to be a church, school, etc. to avoid paying taxes.
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Many country clubs do this, and to maintain their tax exempt status they can only obtain 10% of their revenue from outside sources (corporate functions, non-member play, etc...). As the golf business model has completely collapsed and many private clubs have opened their doors to increased outside revenue sources, they are starting to run into problems with their tax exempt status.
 
My dad and I had a conversation over spring break about some of the tax issues that they have where he works because UVA owns "for profit" businesses as part of their real estate portfolio.
 
Liquid Karma said:
Many country clubs do this, and to maintain their tax exempt status they can only obtain 10% of their revenue from outside sources (corporate functions, non-member play, etc...). As the golf business model has completely collapsed and many private clubs have opened their doors to increased outside revenue sources, they are starting to run into problems with their tax exempt status.
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I am doing some work for a local country club dealing with this issue right now. Most non-profit clubs are exempt from federal (and usually state) income tax under Section 501(c)(7) as social clubs, but they are highly restricted in the amount of non-member revenue they can have without jeopardizing their tax exemption (generally a 15% limit on income from the general public's use of club facilities and 35% limit on non-member income overall). My club wants to sell naming rights to certain features on their courses (Augusta has the Nelson Bridge, maybe you can have the Liquid Karma bridge), but we are running into problems with the 35% limit. I haven't done much work for (c)(7)s before, so this has been very interesting.
 
Wakelaw2006 said:
I am doing some work for a local country club dealing with this issue right now. Most non-profit clubs are exempt from federal (and usually state) income tax under Section 501(c)(7) as social clubs, but they are highly restricted in the amount of non-member revenue they can have without jeopardizing their tax exemption (generally a 15% limit on income from the general public's use of club facilities and 35% limit on non-member income overall). My club wants to sell naming rights to certain features on their courses (Augusta has the Nelson Bridge, maybe you can have the Liquid Karma bridge), but we are running into problems with the 35% limit. I haven't done much work for (c)(7)s before, so this has been very interesting.
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The question at hand regarding the Joel is about local property taxes, but what you say about income taxes is true.
 
DinDC said:
The question at hand regarding the Joel is about local property taxes, but what you say about income taxes is true.
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I realize that, which is why I posted above that the NC property tax exemption only applies to property used for educational purposes and that the operation of sports arenas by educational institutions is considered an educational purpose, so Wake would not pay property taxes on the Joel. I believe (and LK can correct me if I was wrong) that LK's country club example was about income tax exemption, as I believe that the majority position among the states is that property owned by tax-exempt social clubs is not exempt from property taxes (and I would be surprised if those states that do exempt country clubs from property taxes base that exemption upon % of non-member revenue).
 
Wakelaw2006 said:
I realize that, which is why I posted above that the NC property tax exemption only applies to property used for educational purposes and that the operation of sports arenas by educational institutions is considered an educational purpose, so Wake would not pay property taxes on the Joel. I believe (and LK can correct me if I was wrong) that LK's country club example was about income tax exemption, as I believe that the majority position among the states is that property owned by tax-exempt social clubs is not exempt from property taxes (and I would be surprised if those states that do exempt country clubs from property taxes base that exemption upon % of non-member revenue).
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I can say with certainty that our club is not exempt from property taxes, as evidenced by the Forsyth County tax collector being up our asses right now. I meant income taxes, and I'm pretty much in over my head trying to discuss them in any more detail than I have above.

I've heard that some courses have even circumvented the property tax issue using a tax exempt trust. I have zero clue how that works, but I was informed by our tax guru that it isn't possible.
 
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