Owners of exempt real estate in Philadelphia were surprised in
January of this year to receive notices from the Office of Property
Assessment (OPA) requiring both the completion of paperwork
confirming the tax-exempt use of real estate, along with submission
requirements, including organizational charters and by-laws, income
expense statements, statements of assets and liabilities,
descriptions of fundraising activities and other materials. The
form was requested for each exempt parcel, and the communication
from OPA was murky regarding whether or not there was a requirement
for multiple copies of requested information for those entities
that owned more than one parcel.
This effort by OPA to audit tax-exempt properties had been
authorized by Ordinance Number 130123, which had been passed by the
city council and then signed into law on June 13, 2013. The
ordinance was passed in response to concerns that some parcels were
enjoying tax-exempt status even though a change of circumstance
should have resulted in the parcel becoming taxable.
However, once OPA took action, the members of the city
council heard from a range of non-exempt property owners,
particularly members of the clergy. These constituents complained
that the OPA submission requirements were burdensome and
unnecessary. In response, Councilman David Oh introduced Bill
Number 150149, which significantly pared back the information
requirements OPA could impose in connection with its audit of
exempt parcels. Facing a high likelihood that the proposed
legislation would pass, OPA made a strategic retreat and revised
its submission requirements. As complaints from church groups
continued, on March 26, 2015, the city council passed Bill Number
150144, which eliminated all recertification submission
requirements. As this update is written, it is unclear whether the
mayor will sign the new law or whether he and the council will
reach a compromise approach.
In response to the legislative efforts, OPA has extended
from March 31, 2015, to June 1, 2015, its deadline for responding
to the audit information request. Pending Bill Number 150144
becoming law, either by way of the mayor's signature or a veto
override, owners are required only to submit a copy of the OPA form
with answers to the questions on its first page, along with a copy
of the IRS determination letter confirming Section 501(c)(3)
tax-exempt status under the Internal Revenue Code. The lengthy list
of additional documents, which had been required, can now be
ignored. Taxpayers are still required to explain how they utilize
each of their tax-exempt parcels while disclosing any income
received from each of the parcels.
If an organization with which you are familiar believes it
enjoys tax-exempt status for its Philadelphia property and has not
received the forms described above, a representative of the
organization should contact the OPA. If you need assistance with
completing the paperwork, confirming how the law has evolved after
March 31, 2015, or any other aspect of the process, please contact
William Martin at 215.299.2865 or Reuben Asia at 215.299.2190.
A trend, and now common practice, in the construction industry is for an owner or contractor to require contractors and subcontractors to name it as an additional insured on their commercial general liability insurance policies.
Foreclosure/Deficiency Judgment: where a foreclosing bank acquires in rem jurisdiction via service by publication in underlying foreclosure action, bank may still seek personal service over an individual to pursue deficiency judgment.
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