Instructions to Assessors for Application for Real Property Tax Exemption RP-436
Exemption Administration Manual - Part 1
INSTRUCTIONS TO ASSESSORS
APPLICATION FOR REAL PROPERTY TAX EXEMPTION
PROPERTY HELD IN TRUST BY CLERGYMAN
FOR BENEFIT OF CHURCH MEMBERS
NEW YORK STATE DEPARTMENT OF TAXATION & FINANCE
Office of Real Property Tax Services
W.A. Harriman State Campus
Albany, NY 12227
TABLE OF CONTENTS
- General Information
- Filing by Applicant
- Form RP-436 (Initial Application)
Clergyman Holding Title to Property
Church Members Receiving Benefit
- Form RP-436 (Renewal Application)
Clergyman Holding Title to Property
Church Members Receiving Benefit
- Denial of Exemption Renewal with No Change Report by Applicant
Failure to File
- GENERAL INFORMATION
Under the provisions of section 436 of the Real Property Tax Law, property held in trust by a clergyman of a religious denomination for the benefit of members of his church is entitled to the same exemption from taxation as is allowed for property owned by a nonprofit organization under section 420-a of the law, provided that the property held in trust satisfies all the conditions of section 420-a.
Exemption under section 436 must be applied for annually. The initial application for exemption must be made by means of Forms RP-436, RP-420-a-Org, and RP-420-a/b-Use; renewal of exemption should be applied for using Forms RP-436, RP-420-a/b-Rnw-I, and RP-420-a/b-Rnw-II. * A renewal application may be used only after exemption has been granted on the basis of application forms RP-436, RP-420-a-Org, and RP-420-a/b-Use.
The purpose of Form RP-436 and the RP-420 forms that must accompany it is to provide information that the assessor needs to make a determination of taxable status. However the forms are not meant to limit further inquiry by the assessor. Where he finds it necessary, the assessor SHOULD seek additional information from the applicant.
If an application for exemption under section 420-a is denied on the basis of the RP-420 forms, any application for exemption under section 436 must also be denied. Conditions of property use reported in Form RP-436 that are justifiable grounds for denying exemption or renewal of exemption are described below in the discussion of that form. Note, however, that renewal of exemption under section 436 may be denied even if no organizational or property use change has occurred since application for exemption was last filed. Continuation of exemption may be denied on the basis of the renewal application (and any additional documentation that the assessor may request) if the assessor determines that the property was in fact not entitled to exemption the previous year but was erroneously granted the exemption.* For guidance in processing Forms RP-420-a-Org and RP-420-a/b-Use, see Instructions to Assessors, Application for Real Property Tax Exemptions for Nonprofit Organizations, p. 241.47 in Section 4.05 of this volume. For a discussion of Forms RP-420-a/b-Rnw-I, and RP-420-a/b-Rnw-II, see Instructions to Assessors, Renewal Application for Real Property Tax Exemption for Nonprofit Organizations, p. 241.73 in Section 4.05 of this volume.
- FILING BY APPLICANT
All property owners seeking exemption pursuant to section 436 must submit information on organizational conditions, property use, and, if necessary, additional information. In the first year in which application forms were required to be filed in the assessor's office(1979 in most assessing units), all applicants seeking exemption pursuant to section 436 (including those property owners previously exempt) must have filed the initial application forms then in use -- Forms RP-436, RP-420-Org, RP-420-a/b-Use, and perhaps Schedule A, RP-420-a/b-Org. Thereafter, any property owner seeking exemption pursuant to this section for the first time must file the current initial application forms. A three-part application must be filed in each assessing unit in which exemption is sought: (1) Form RP-436, (2) Form RP-420-a-Org (plus Schedule A, RP-420-a/b-Org, if required), and (3) Form RP-420-a/b-Use. One copy of Form RP-436 and Form RP-420-a-Org must be filed in each assessing unit. One copy of Form RP-420-a/b-Use must be filed in each assessing unit for each separately assessed parcel of property for which exemption is sought. Each year following the year in which exemption is first granted on the basis of the initial application, the owner must file a renewal three-part application, using the following: (1) Form RP-436, (2) Form RP-420-a/b-Rnw-I (plus Schedule A, RP-420-a/b-Rnw-I, if required), and (3) Form RP-420-a/b-Rnw-II.
In those villages which have opted to use the town or county assessment roll pursuant to section 1402(2) of the Real Property Tax Law, one copy of Form RP-420-a/b-Vlg may be submitted in lieu of Forms RP-420-a-Org or Form RP-420-a/b-Rnw-I. The application should be completed and filed by someone authorized by the organization to do so.
The assessor should mail the required forms to all applicants well in advance of the taxable status date. The assessor should enter the parcel location and assessment roll information on the forms before mailing them.
Each applicant should submit the completed forms to the assessor on or before the taxable status date. If a property owner fails to submit the required forms by that time, the assessor should contact the owner and remind him of the necessity to file the forms. If the property owner refuses or fails to do so, the assessor should enter the property as taxable on the tentative assessment roll. The owner may then seek exemption from the board of assessment review or the courts.
- FORM RP-436 (INITIAL APPLICATION)
Questions 1, 4, and 5 are intended to provide evidence showing that the person holding title to the property is in fact the kind of person that qualifies the property for exemption under section 436. If the person named in Question 1 has not had formal training as a clergyman and has not been formally ordained, the assessor should ask the applicant to furnish some proof that he has been authorized to serve as a clergyman of the church named in Question 6. If the assessor determines that the applicant has not been so authorized, he should deny exemption of the property.
In addition, the applicant must supply the assessor with a copy of the trust instrument by which he holds title to the property. If the applicant fails to supply such a document, exemption of the property should be denied.Case 1 (Ineligible Applicant)
Applicant is not an authorized clergyman of the church named in Question 6 of Form RP-436.Assessor Action: Deny exemption.
Case 2 (No Trust Instrument)
Applicant has failed to file with the assessor a copy of the trust instrument by which he holds title to the property.Assessor Action: Deny exemption.
Question 6 in Form RP-436 and the questions in Form RP-420-a-Org are intended to provide evidence that the church members receiving the benefit of the property held in trust by the applicant are in fact members of a religious "denomination" eligible for a section 420-a exemption (and thus qualify the applicant for a section 436 exemption).
If the organization described in Form 420-a-Org has not been recognized by the Internal Revenue Service as exempt from federal income tax as a church, synagogue, or similar establishment, the assessor will have to investigate further into the nature of the organization. For this purpose, he may find it convenient to use Part E of Schedule A, Form 420-a/b-Org, which includes several criteria useful in determining whether an organization is a religious denomination. If, for example, the members of the organization do not have a religious doctrine that they share in common, the organization is not a "denomination" for the purposes of section 420-a, and property tax exemption should be denied.
Case 3 (Ineligible Church)
Church named in Question 6 of Form RP-436 is not a religious denomination.Assessor Action: Deny exemption.
- FORM RP-436 (RENEWAL APPLICATION)
Case 4 (Ineligible Applicant): Applicant is no longer an authorized clergyman of the church named in Question 6 of Form RP-436.Assessor Action: Deny renewal of exemption.
Case 5 (Ineligible Church): Church named in Question 6 of Form RP-436 is no longer a religious denomination.Assessor Action: Deny renewal of exemption.
- DENIAL OF EXEMPTION RENEWAL WITH NO CHANGE REPORTED BY APPLICANT
All or part of the property was in fact not entitled to exemption the previous year but was erroneously granted exemption.Assessor Action: Deny renewal of exemption for that portion of the property involved.
The property owner failed to file the required renewal application forms in time for preparation of the tentative assessment roll.Assessor Action: Deny renewal of exemption for all parcels involved.
Please send general questions or comments to Orpts Solutions Center.