Home > Critical Tax Exemption for Georgia Nonprofits Affirmed by Supreme Court Decision

Critical Tax Exemption for Georgia Nonprofits Affirmed by Supreme Court Decision

ATLANTA — Nov. 9, 2010 — Today, Georgia nonprofits owning property and earning revenue through rentals or other income producing activities can relax for a moment. Yesterday, the Georgia Supreme Court issued a precedent-setting decision reversing a ruling by the Athens-Clarke County Board of Tax Assessors that would have eliminated the property tax exemption for a small area nonprofit, Nuçi’s Space, who rents its facility to raise funds for mental health services.

The Georgia Center for Nonprofits, as the leading advocate for our state’s nonprofit sector, has been hard at work since the issue arose back in 2009, advocating for member Nuçi’s Space and responding to the broader threat to nonprofits statewide. The organization has championed the protection of the nonprofit tax exemption by writing and financially supporting briefs to the court and convening leaders around the issue. 

“In these economic times, when nonprofits are being urged to diversify funding streams and are struggling to meet rising needs, we celebrate this decision,” said Karen Beavor, President and CEO of the Georgia Center for Nonprofits. 

Beavor cautions however that Georgia nonprofits must remain on alert, noting that “this case would have, if lost, opened the door to a sweeping loss of property tax exemption throughout the state for those organizations that own property and have a revenue generating activity on that property. Literally millions of charitable dollars that would have otherwise gone to cause related activity would have been redirected to local government tax payments.” 

This seemingly small, local issue threatened to change the definition of what is charitable in the state. The case of Nuçi Phillips Memorial Foundation, Inc. v. Athens Clarke County Board of Tax Assessors challenged Nuçi’s fitness in meeting the definition of “charitable” as it is defined in the Georgia tax code. The favorable decision by the Supreme Court offers a reprieve, and also served to clarify the interpretation of the code relative to the use of nonprofit property for revenue generation in charities.  

The Georgia Center for Nonprofits urges every Georgia nonprofit who currently owns property to read the court’s decision in this matter and apprise your board.  If previously denied an exemption, this decision offers a strong argument for exemption. 

Learn more about this critical issue and the ongoing work of the Georgia Center for Nonprofits to support and protect our state’s nonprofit sector at www.gcn.org.