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Lev
Lev, Tax Advisor
Category: Tax
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Experience:  Taxes, Immigration, Labor Relations
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We are a 501c3 church with a large facility in Texas, We are

Customer Question

Hello there, We are a 501c3 church with a large facility in Texas, We are considering "renting" a small portion of the building to a local business. There is not going to be any exchange of money because the small business is going to exchange building maintenance for the cost of the small portion of our building.
Is this going to be a problem with property taxes or anything else that might get our non-profit status revoked?
Thanks, Church
Submitted: 11 months ago.
Category: Tax
Customer: replied 11 months ago.
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Expert:  Lev replied 11 months ago.

You woudl need to record the value of rent and the value of building maintenance - that are likely will be same.
That will not create any issues with your 501c3 status.
But fro property tax exemption - a part of the building that is not used for 501c3 purposes may not be exempt.

Expert:  Lev replied 11 months ago.

A nonprofit religious organization is exempt from franchise, sales and the state portion of hotel occupancy taxes if it is an organized group of people regularly meeting at a particular location with an established congregation for the primary purpose of holding, conducting and sponsoring religious worship services according to the rites of their sect.

Organizations that simply support and encourage religion as an incidental part of their overall purpose, or that further religious work or teach their membership religious understanding, will not qualify for exempt status under this category.

To apply for exemption, complete AP-209 and provide all required documentation as listed in the application. If the organization is unincorporated, include a copy of the organization’s governing document, such as the bylaws or constitution. The document must show that the organization is nonprofit. We will review the corporation’s formation documents on file with the Texas Secretary of State to verify that the corporation’s purpose is consistent with the requirements of this section. Non-Texas corporations must also include a copy of the corporation’s formation documents and a current Certificate of Existence issued by their state of incorporation.

Regarding texas Charitable Organization Property Tax Exemption - see here

http://comptroller.texas.gov/taxinfo/exempt/exempt_prop_srch.html