1. (1) Introduction. This rule explains the property tax exemption available under the provisions of RCW 84.36.060 (1)(a) to art, scientific, or historical collections.

2. (2) Definitions. For purposes of this rule, the following definitions apply:

   1. (a) "Governmental entity" means any political unit or division of the federal, state, city, county, or municipal government.
   2. (b) "Property" means all real and personal property exclusively used to secure, maintain, and exhibit art, scientific, or historical collections.

3. (3) Exemption for existing property. All art, scientific, or historical collections owned by associations maintaining and exhibiting the collections to the general public and not for profit, together with all real and personal property owned by these associations and used exclusively to secure, maintain, and exhibit the collections, will be exempt from taxation under the following conditions:

   1. (a) An organization, association, or corporation must be organized and operated exclusively for artistic, scientific, or historical purposes.

   2. (b) The organization, association, or corporation organized and operated for artistic, scientific, or historical purposes must receive a substantial part of its income from a governmental entity or through direct or indirect contributions of money, real or personal property, or services from the general public. Admission or entrance fees derived from exercising or performing its purpose or function will not be included within the figures used to calculate "a substantial part" of the organization's, association's, or corporation's income.

      1. (i) For example, an art museum may receive support from a city government and from donations made by the general public in addition to general admission fees paid by visitors. When determining whether the art museum receives a substantial part of its income from a governmental entity or through contributions from the general public, the admission fees may not be considered as contributions from the general public.
      2. (ii) Any organization, association, or corporation that relies on services donated by the general public for a substantial part for its support must maintain records identifying the individuals who donate their services and the number of hours they donate. The value of donated time will be calculated by using the federal minimum wage standard.

4. (4) Exemption for property under construction or soon to be used for an exempt purpose. Property that is being constructed, remodeled, or otherwise prepared to maintain and exhibit art, scientific, or historical collections, may qualify for exemption under certain circumstances. A nonprofit organization, association, or corporation seeking an exemption for property not currently being used for an exempt purpose may qualify if the property will be used for an exempt purpose within a reasonable period of time and proof is submitted that a reasonably specific and active program is being carried out to enable the property to be used to maintain and exhibit an art, scientific, or historical collection.

   1. (a) Acceptable proof of a specific and active building or remodeling program must include, but is not limited to, the following items:

      1. (i) Affirmative action by the board of directors, trustees, or governing body of the nonprofit organization, association, or corporation endorsing and underwriting the construction or remodeling;
      2. (ii) Itemized reasons for the proposed construction or remodeling;
      3. (iii) Clearly established plans for financing the construction or remodeling; and
      4. (iv) Building permits necessary to begin or continue the construction or remodeling.
   2. (b) Property under construction will not qualify for exemption during this interim period if the property is used by, loaned to, or rented to a for-profit organization or business enterprise.
5. (5) Additional requirements. Any organization, association, or corporation applying for a property tax exemption under this rule must also comply with the provisions of WAC 458-16-165. WAC 458-16-165 provides additional conditions and requirements that must be complied with to obtain a property tax exemption pursuant to RCW 84.36.060.

[Statutory Authority: RCW 84.08.010, 84.08.070, 84.08.080, 84.36.389, and 84.36.865. WSR 15-07-021, § 458-16-280, filed 3/10/15, effective 4/10/15. Statutory Authority: RCW 84.08.070, 84.34.141, 84.36.865, 84.52.0502. WSR 09-19-010, § 458-16-280, filed 9/3/09, effective 10/4/09. Statutory Authority: RCW 84.36.865 and 84.36.060. WSR 99-18-008, § 458-16-280, filed 8/19/99, effective 9/19/99. Statutory Authority: RCW 84.08.010, 84.08.070 and chapter 84.36 RCW. WSR 94-07-008, § 458-16-280, filed 3/3/94, effective 4/3/94. Statutory Authority: RCW 84.36.865. WSR 86-12-034 (Order PT 86-2), § 458-16-280, filed 5/30/86; WSR 85-05-025 (Order PT 85-1), § 458-16-280, filed 2/15/85; WSR 81-21-009 (Order PT 81-13), § 458-16-280, filed 10/8/81; Order PT 77-2, § 458-16-280, filed 5/23/77; Order PT 76-2, § 458-16-280, filed 4/7/76. Formerly WAC 458-12-235.]