Wyo. Code R. 011-0006-14
Effective Date: 05/27/2008 to 06/02/2014
Rule Type: Superceded Rules & Regulations
Reference Number: 011.0006.14.05272008
(a.) These standards provide a reference to accepted definitions, procedures and criteria for the exemption from assessment and taxation of real and personal property.
(b.) All questions of exemption cannot be addressed and answered by rule. These standards are to serve, together with applicable law and Departmental guidelines, as a ready reference to commonly encountered problems. The general law governing exemptions is found in Article 15-12, Wyoming Constitution and W.S. 39-11-105.
(c.) These rules are promulgated under the authority of W.S. 39-11-102(b).
(a.) For county assessed property, county assessors are responsible for making the initial determination of exemption.
(i) For publicly owned property the assessor begins with the legal presumption the property is exempt.
(ii) For all other property, both real and personal, the exemption process begins with the legal presumption the property is assessable utilizing the established principle that taxation is the rule, and exemptions are not presumed. Specific exemptions are provided by statute and constitution. In applying specific exemptions, the statutes and constitution shall be strictly construed. This does not mean, however, any possible doubt must be resolved to approve the exemption. Only if the doubt is well founded should the exemption be denied.
(b.) For Department of Revenue assessed property, the Property Tax Division Administrator is responsible for making the initial determination of exemption.
(i) For all property, both real and personal, the exemption process begins with the legal presumption the property is assessable utilizing the established principle that taxation is the rule, and exemptions are not presumed. Specific exemptions are provided by statute and constitution. In applying specific exemptions, the statutes and constitution are to be strictly construed. This does not mean, however, any possible doubt must be resolved to approve the exemption. Only if the doubt is well founded should the exemption be denied.
(c.) Three considerations are typically involved in determining whether a property should be exempt:
(i) Ownership of the property;
(ii) Use of the property; and/or
(iii) Type of property.
Section 3. Burden of proof.
(a.) Except for publicly-owned property, the burden is on the owner to prove the property meets exemption requirements. An affidavit or similar form is recommended to establish basic facts on ownership, use and type of property.
(b.) For publicly owned property, the burden is on the taxing authority to establish taxability.
Section 4. Publicly owned property - W.S. 39-11-105(a)(i)-(vi).
(a.) Publicly owned property is not, per se, exempt from taxation. The property is exempt only "when used primarily for a governmental purpose."
(b.) The phrase "governmental purpose" cannot be precisely defined. The following considerations should be evaluated:
(i) If a service or function is obligatory (one the governmental entity must perform as a legal duty imposed by statute), the function is governmental and the associated property is exempt.
(ii) If a service is rendered gratuitously, supported by taxes, and for the public welfare or enjoyment generally, the property associated with providing such service is exempt.
(iii) W.S. 39-11-105(a)(v) specifically identifies certain municipal property which is exempt (used primarily for a governmental purpose).
(iv) W.S. 39-11-105(a)(i)(A)-(E) and (ii)(A)-(D) identify specific uses of federal and state property which are not exempt (not used for governmental purposes).
(v) Property owned by a governmental entity acting in its proprietary capacity is not exempt, (e.g. where a city enters the field of private competitive business for profit or into activities which may be and frequently are carried on through private enterprises).
Real property owned by the United States in trust for the benefit of an individual Indian is exempt, whether the property is located on or off-reservation.
(a.) The word 'exclusively' shall not be construed so narrowly and literally that it defeats the purpose of the exemption. Any use, however, other than one qualifying as religious worship under the statute must be de minimis (truly minor). As an example, the receipt of pay for temporary use of church property, when not needed or desired for religious services, is minor and will not affect the exemption.
(b.) The real property exemption for religious worship, church schools and church parsonages, includes land around such institutions reasonably necessary for convenient ingress and egress, light, air, or appropriate ornament. However, lots adjacent to a church building which are not reasonably needed for the convenient enjoyment of the building as a church are not exempt.
(c.) Property used for religious worship together with other multiple uses including educational, commercial, social or charitable, is not exempt. (Kings Ranch, #85-4)
(d.) A "church school" is one operated under the auspices or control of a local church, religious congregation, or denomination established to promote and promulgate the commonly held religious doctrines of the group, though it may also include basic academic subjects in its curriculum.
(e.) The assessor may consider evidence of sales/use tax exemption as a qualified religious organization granted by the State pursuant to W.S. 39-15- 105(a)(iv)(B).
(a.) "Fire engines or stations" means dedicated equipment and land and improvements similar to that owned by governmental entities as fire engines or fire stations used exclusively to support fire fighting activities. The fundamental basis for the exemption is the benefit conferred upon the public by privately-owned fire engines and fire stations, and the consequent relief, to some extent, of the burden upon the state to use its facilities and equipment to support fire fighting activities.
(b.) "Equipment used to extinguish fires" means equipment functionally capable of extinguishing fires, which is primarily and typically used for fire suppression. The phrase does not include equipment used to protect the health or safety of employees in fire situations nor equipment used to detect the presence of fire.
(c.) A partial exemption for a fire station may only be given where a distinct, identifiable portion of the property is used for qualified purposes. See Section 15 of this Chapter.
Not all property of a museum or hospital district is exempt. A museum district may only exempt property owned for museum purposes (W.S. 18-10-203). A hospital district may only exempt property owned for hospital purposes (W.S. 35-2-403). By definition, a nursing home owned by a hospital district is exempt as a "hospital purpose", while a house owned by a district for use by the hospital administrator is not exempt.
(d.) "Marketable by-products" means materials collected by the equipment or property at issue which are either directly marketed, or recycled within the operation or process for eventual sale or use for value.
(e.) If only a portion of the property is to be exempt, the calculation shall result in a reasonable apportioning of the value of the property between pollution control and non-pollution control purposes, (e.g., other beneficial purposes or the recovery of marketable by-products), if any.
(a.) Purpose and Scope: Assessing jurisdictions as used in this subsection of the rules shall refer to either county assessment offices or the Department of Revenue and each entity shall give consideration to the exemption of Intangible Personal Property with the valuation process. The 2006 Wyoming Legislature in Chapter 31, 2006 Session Laws enumerated in W.S. 39-11-101 (a)(vii)(xvi) and in W.S. 39-11-105 (b)(i-vi) the intangible exemptions.
(b.) Definitions: As used in this subsection the following terms from W.S. 39-11-101 apply:
(i) "Intangible personal property" means personal property that lacks mass and cannot be seen, felt, weighed, measured or otherwise perceived by the senses; property that has no physical existence beyond merely representational. Intangible property's value lies chiefly in what it represents and its existence may be evidenced by a document.
(ii) "Tangible personal property" means personal property that, by its nature, is perceptible to the senses; property that has a physical presence beyond merely representational and that is capable of being touched; property that is able to be perceived as materially existent; property that is not intangible.
(a.) Exemptions: As used in this subsection the following exemptions are enumerated in W.S. 39-11-105 (b) (i-vi):
(i.) Goodwill if established and separately identified on a company's books and records, or affirmed by generally accepted accounting, or appraisal principles;
(ii.) Any of the following intangible items:
(A.) Workforce in place including its composition and terms and conditions, contractual or otherwise, or its employment;
(B.) Business books and records, operating systems or any other information base including lists or other information with respect to current or prospective customers';
(C.) Any patent, copyright, formula, process, design, pattern, know-how, format, proprietary computer software (customized versus standard prewritten programs) or other similar items';
(D.) Any customer-based intangible. As used in this subparagraph, "customer-based intangible" means composition of market, market share and any other value resulting from future provision of goods or services pursuant to relationships, contractual or otherwise, in the ordinary course of business with customers. In the case of a financial institution, “customer-based intangible” includes deposit base and similar items;
(ii.) The intangible must be capable of being separately identified on the taxpayer’s company:
(D.) Other documentation as required by the assessing jurisdiction.
(ii.) Statement of whether the exemption was granted or denied;
(iii.) Explanation for all denied exemption items;
(iv.) Calculations on determination for all granted exemption amounts;
(v.) Appraisal methods utilized to determine exemption amounts;
(vi.) Appeal rights, if separate from the final fair market value of the property.
(n.) Annual Report Audit Rights and Responsibilities: The appropriate assessing jurisdiction reserves the right to engage the State of Wyoming, Department of Audit or a third party designee to conduct ad valorem tax audits on reporting taxpayer's.
Section 11. Schools, orphan asylums and hospitals - W.S. 39-11-105(a)(xxv).
(a.) The fundamental basis for this exemption is the benefit conferred upon the public by schools, orphan asylums and hospitals, and the consequent relief, to some extent, of the burden upon the state to educate, care and advance the interests of its citizens. Such institutions thus confer a benefit upon the general citizenry of the state and render an essential service for which they are relieved of certain burdens of taxation.
(b.) "Schools" means property owned by private educational institutions and used primarily to provide "traditional education" equivalent to public education. "Traditional education" means systematic instruction in useful branches of learning afforded through methods common to public schools and educational institutions, directed at an indefinite class of persons, which benefits the general public indirectly because it is of a nature ordinarily provided by the government at taxpayer expense.
"Traditional" may include courses offering specialized instruction such as those centered around teaching outdoor leadership and practical field experience to professionals in the field of outdoor education.
(i.) "Traditional" does not include continuing education or education for the professional advancement of an organization's members.
(ii.) An entity is rebuttably presumed to be a "school" if it possesses a license and teacher certification from the Wyoming Department of Education, or evidence of courses for which college or university credit is given.
(c.) "Hospital" means property used to provide either traditional hospital or nursing home care, promote health care, or provide health related assistance to the general public. In general the institution shall have policies which reflect recognized standards adopted by public health care institutions therefore lessening governmental responsibility in this area.
(i.) The institution shall provide health related assistance to the general public without regard to race, religion or gender.
(ii.) (i.) Indigent care shall be afforded through admission to the institution based on the clinical judgment of the physician, not upon the patient's financial ability or inability to pay.
(d.) The property of schools, orphan asylums and hospitals shall not be used for private profit (see Section 11(b)-(c) of this Chapter for relevant criteria).
(e.) If a school, orphan asylum or hospital confers benefit only upon the citizens of another state, its property is not exempt.
Section 12. Secret, benevolent and charitable societies and associations - W.S. 39-11 105(a)(xxvi).
(a.) The following definitions apply:
(i.) "Secret" means fraternal or lodge-type societies or associations which are not necessarily secret or ritualistic.
(ii.) "Charity" is a gift for the benefit of an indefinite number of persons in Wyoming, by bringing their minds or hearts under the influence of education or religion, by relieving their bodies from disease, suffering or constraint, by assisting them to establish themselves in life, or by erecting or maintaining public buildings or works. The fundamental basis for this exemption is the benefit conferred upon the public, and the consequent relief, to some extent, of the burden upon the state to care and advance the interests of its citizens.
(iii.) "Benevolent" includes purposes which may be deemed charitable, as well as acts dictated by kindness, good will, or a disposition to do good, the objects of which have no relation to the promotion of education, learning, or religion, the relief of the needy, the sick, or the afflicted, the support of public works, or the relief of public burdens. The term has wider significance than "charitable" as a legal tenet but shall be limited to purposes or activities of sufficient public importance and wide-spread social value.
(iv.) The word "and" in the phrase "secret, benevolent and charitable society or association" shall be understood in the disjunctive, not conjunctive.
(b.) To be exempt under this section, the institution shall fulfill the above definitions, and operate primarily for non-commercial purposes without any element of private profit.
(c.) In making a determination of use for private profit, one distinctive feature is whether the entity has capital stock and a provision for dividends or profits, or whether it derives funds mainly from public and private charity, holding them in trust to be expended only for charitable and benevolent purposes.
(i.) An institution may charge fees or engage in business, but no gain or value may be distributed to members or stockholders. The officers and members may have no pecuniary interest in the property from which they gain. Payments made to officers, employees, contractors and suppliers shall be reasonable and not an indirect means of conferring gain or profit to private persons.
(ii.) Revenue from fees paid by recipients of the charity or services shall be devoted only to the maintenance of the institution or its purposes.
(iii.) A grant of sales/use tax exempt status by the State as a qualified charitable organization, or the grant of income tax exempt status by the Internal Revenue Service as a '501(c)(3)' or similar organization, is not binding in making the determination of whether the property of the entity is exempt from ad valorem taxation. Assessors may consider compliance with and operation under the tax exempt provisions of the Internal Revenue Service Code or an exemption from sale and use tax as a rebuttable presumption the institution's operations are reasonable and not for profit.
(iv.) The matter of private profit concerns the way property is used, not solely the ownership thereof. The entire use of the property by all concerned shall be considered.
(d.) The property at issue shall not be used primarily for a 'commercial purpose', that is use of property or any portion thereof to provide services, merchandise, area or activities for a charge, which are generally obtainable from any commercial enterprise and are collateral to the purpose of the secret, benevolent and charitable society or association.
(i.) Commercial purpose includes, without limitation, the operation for charge of bars, restaurants, dancing areas, merchandise shops, housing, theaters and bowling alleys.
(ii.) The use of property for commercial purpose is controlling, not whether or not a profit is actually made nor how the revenue is ultimately used. If an activity is considered 'commercial', it does not become 'non-commercial' merely because the revenue derived from the commercial use is devoted to charitable or authorized purposes.
(e.) If a secret, benevolent and charitable society or association confers a benefit only upon the citizens of another state, its property is not exempt.
(a.) 'Senior citizen centers' include property used to provide transportation, information, and recreation facilities and other services which enable senior citizens to maintain their independence and avoid institutionalization.
(i.) Senior citizen meal facilities or senior citizen housing complexes which are part of a senior citizen center are exempt. For the exemption, nonprofit organizations providing meals or services to senior citizens shall possess certification of such activity by the division of public assistance and social services of the department of health and social services (or its successor).
(ii.) Housing made available to senior citizens which is not part of a senior citizens' center (such as a retirement home) is exempt only if the entity owning the property meets the criteria of a "charitable and benevolent society or association" in Section 11 of this Chapter. A retirement home is taxable if the residents provide their own furnishings and are charged for the cost of operating the home, including extra amenities enjoyed by the residents. Such a retirement home constitutes a commercial enterprise, even if operated on a non-profit basis with reduced charges.
(b.) In order to be exempt under this section, the senior citizen center shall be operated without any element of private profit and primarily for non-commercial purposes. The definitions and restrictions in Section 11(c)-(d) of this Chapter shall apply.
(c.) If a senior citizens' center confers a benefit only upon the citizens of another state, its property is not exempt.
(a.) In order to be exempt under this section, the corporation shall demonstrate:
(i.) income tax exempt status authorized by the Internal Revenue Service as a "501(c)(3)" corporation; and
(ii.) the property is owned and used by the corporation to serve persons with disabilities, mental illness, substance abuse problems, or family violence problems; and
(iii.) the extent to which the property is operated without any element of private profit, and primarily for non-commercial purposes as limited and defined by Section 11(c)-11(d) of this Chapter.
(b.) Housing made available to persons with disabilities, mental illness, substance abuse or family violence problems is not exempt if the residents provide their own furnishings, and are charged for the cost of operating the housing project, which constitutes a commercial enterprise, even if operated on a non-profit basis with reduced charges.
(a.) Taxpayers may claim exemption on the basis of one or more statutory provisions. Careful analysis of the ownership and use of the property is required.
(i.) For example, museum property may be exempt because: it is a public municipal museum operated for a governmental purpose under W.S. 15-1-103 and W.S. 39-11-105(a)(v); it is a public county museum operated for a governmental purpose under
W.S. 18-10-101 and W.S. 39-11-105(a)(iii); it is property of a special museum district under W.S. 18-10-201 and W.S. 39-11-105(a)(xvi); or it is owned by a non-profit entity qualifying as a charitable or benevolent association and operated on a noncommercial basis under W.S. 39-11-105(a)(xxvi). Under this example only one exemption is applicable based on ownership and operation.
(ii.) (Under appropriate circumstances more than one exemption provision may apply, (e.g. an entity may be both a school and a nonprofit charitable and benevolent entity owning property for a non-commercial use).
(iii.) Different criteria are applicable and each shall be separately and carefully analyzed in making an exemption determination.
(a.) The occasional rental of property by an exempt entity, if such rental does not interfere with the use of the property consistent with the exemption standards, will not affect the exemption.
(b.) With the exception of (c) and (d) below, the rental of property to an exempt entity (including rental by an exempt entity to an exempt entity) for any gain or profit shall render the property taxable. The commercial use of the property by the owner is part of its total use, and therefore an exemption is not available.
(c.) The leasing of publicly owned property is not, of itself, a use for nongovernmental purposes if the primary use is reasonably necessary to the efficient provision of a governmental function or service. The fact a governmental entity accomplishes such function through a lessee will not affect the exemption. If, however, governmental property is used by a lessee for non-governmental purposes, the property is not exempt.
(d.) Leased property owned by the State Loan and Investment Board through foreclosure is exempt.
(e.) If a lease arrangement results in taxability of property owned by an exempt entity, the exempt entity owes the tax. The lessee shall not be assessed as leaseholds are not subject to taxation.
(a.) A partial exemption may only be allowed where a separately identifiable portion of the property is used for qualified purposes (either primarily or exclusively, based on the legal requirement). Where a partial exemption is allowed, the non-exempt portion shall be taxed according to its proportionate value, if any.
(b.) A partial exemption may not be granted based upon percentage use of shared or common space or facilities. If a shared use is present a decision must be made as to whether the shared use is of such nature or duration as to invalidate the exemption.
Section 18. Undeveloped, unconstructed or unused property.
(a.) For exemptions requiring a specific use to qualify, neither ownership of the property nor stated objectives of the entity's organization is sufficient. To justify an exemption, actual and immediate use of the property consistent with the applicable exemption standard is required. The mere hoding of the property by an entity for future or prospective use is not sufficient.
(b.) An exemption may be granted once construction or use commences consistent with the exempt purpose.
Section 19. Conveyances.
(a.) Any property, title to which is transferred of record to an exempt entity prior to January 1 of any given year, is not subject to taxation for that year provided an exemption otherwise applies.
(b.) With the exception of (c) below, if title to property is transferred of record after January 1, the property is taxable for the entire year.
(c.) Property of the State Loan and Investment Board is exempt if it becomes "owner" of the property pursuant to W.S. 11-34-126 before the fourth Monday in June.
(d.) There is no authority for the county to pro rate taxes on real property. The proration of taxes is a private, contractual matter between the parties to a conveyance. Absent a contractual arrangement, the provisions of W.S. 39-13-103(c) and 39-13- 107(b)(i)(E) apply.
Section 20. Taxpayer rights.
(a.) Any person adversely affected by a decision of a county assessor on an exemption issue may file a protest with the county board of equalization.
(b.) An exemption issue may also be addressed to a board of county commissioners pursuant to W.S. 39-13-109(c)(ii), or to the district court pursuant to W.S. 39-13-109(c)(i).