Page 12 - December 2015
P. 12

And the Tax Man Cometh Again

      This is urgent information for Lodges                     per IRS Form 990 or 990-N, are under $5,000 the fee is
               that own real property                           $0. Although the application form does not address it,
                                                                the news articles states that non-profits need to submit a
  Just when you think you’ve got everything covered             copy of their Form 990 so that the Montana Department
something else pops up. It’s sort of like playing “Whack a      of Revenue can verify gross receipts. I would assume that
Mole”. As you will recall, we spent a considerable amount       would only apply if you are claiming that gross receipts are
of time getting everything squared away with the Internal       under $5,000 in order to avoid paying the fee.
Revenue Service and Form 990 filings. For most Lodges,
it was an easy process with the ability to just file an annual    After the exemption application is reviewed by the
online 990-N postcard. We’ve had that issue behind us for       Department of Revenue, you will be sent a letter stating
a while.                                                        either the approval or denial of the exemption. If you
                                                                rent or lease any part of your Lodge building to anyone
  Now, the Montana Department of Revenue is getting             who uses it for business or profit making purposes, you
into the picture. With the last legislature, the Department     will generally not be granted an exemption from property
of Revenue was tasked with renewing property tax                taxes.
exemptions. By way of some background, the counties used
to handle all property tax assessments and exemptions. In         Remember, this application for exemption only applies
the early 1980’s this function was transferred to the state,    to Lodges that own real property. If your lodge rents or
which keeps a complete tax record of all real property.         shares property, you are not required to file.
At that time, the record of all exempt property was
transferred as well. However, some of those records go            Also, we would like to point out that all temple
back to statehood and many have not been vetted in years.       associations will be required to file as well. If the temple
That brings us to where we are today.                           association has its own Federal ID number and IRS
                                                                exemption, separate from the Lodge group exemption
  The state is reviewing and renewing the exempt property       through Grand Lodge, that temple association will be
records. All non-profit organizations that own real             required to file as well. Further, if your Lodge sponsors
property will need to complete a new Real Property Tax          its own §501(c)(3) charitable organization that owns real
Exemption Application, Form AB-30R by March 1, 2016             property, that charitable organization will be required to
in order to have their real property exempt from property       file for any real property it owns.
tax.
                                                                  Since all Lodges in Montana are operated under the
  This is going to take some effort. You will need to have      Grand Lodge AF&AM of Montana charter and are covered
and include:                                                    by the Grand Lodge IRS group non-profit exemption, the
                                                                Executive Committee thought it might be easier if Grand
1. Articles of incorporation (if incorporated) or               Lodge prepared a group filing to the Montana Department
constitution and bylaws (if not incorporated).                  of Revenue. After discussion with the Department of
2. Deed, contract for deed or notice of purchaser’s interest    Revenue, we received approval to file all lodges as a group.
that evidences ownership.
3. Photograph of the property.                                    In order to do that we need the cooperation of the lodges
4. Federal Internal Revenue Service Tax Exempt Status           that own real property. Your lodge will need to prepare
letter, such as a copy of 501(c)(3) letter. If you do not have  Form AB-30R for your lodge, attach a copy of the deed
the letter, include a separate sheet with the reason why.       covering the property, attach a picture of the property and
5. Letter explaining how the organization is specifically       a check in the amount of the application fee. If your Lodge
using the real property. For example, offices for               building is rented to any business enterprise, please advise
organization, housing for low income, church, parsonage,        us of that fact. If your lodge owns multiple properties, you
etc.                                                            will need to complete those steps for each property.

  In addition, you will need to complete the Form AB-             Some Lodges may not have or be may not be able to
30R. We have included a sample Form AB-30R for your             locate a copy of the deed for their property. If that is the
reference. There is a fee associated with this exemption        case for your Lodge, you should be able to obtain a copy of
filing. The fee is $25 for properties with structures and       the most recent deed from your County Recorder. There
$15 for vacant land. If your total annual gross receipts,       is usually a fee to do this.
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