Monday, August 15, 2011
The New York Times reports that California nonprofit groups are being increasingly scrutinized with respect to the benefits they provide to state residents, with groups that are deemed not to be benefiting state residents sufficiently losing their property tax exemptions. The denials by county assessors are apparently based on the requirement (see Q&A13) that exempt property be used in way that "primarily benefits persons within the geographical boundaries of the State of California." The article notes, however, that this requirement appears to be have been applied inconsistently and therefore may be constitutionally vulnerable as a result. It is also not clear how such a requirement is consistent with the Commerce Clause of the U.S. Constitution, given the Supreme Court's decision in Camps Newfound/Owatonna, Inc. v. Town of Harrison, 520 U.S. 564 (1997).