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Tina, Lawyer
Category: Legal
Satisfied Customers: 8775
Experience:  JD, BBA Over 25 years legal and business experience.
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Our Church is a 501c3 non-profit and has a contract

Customer Question

Our Church is a 501c3 non-profit and has a contract arrangement with Verizon and AT&T (Cell Providers) for housing their cell towers on our building because we are up on a hill
and it provides optimum performance. Included in this arrangement the Cell
Providers pay us separately for the electric usage. They have a separate meter on our site to monitor their usage and then we bill them at the higher prevailing rates as they push Lighthouse into higher electric rates.
We are getting ready to install solar carports in church's parking area that will substantially reduce our SDG&E bill (averaging around $6K/mth) to a loan expense of $4.2K/mth. Then the Church intends to bill Verizon and AT&T at the higher SDG&E rates. Most likely this rate will be lower than our new loan expense but in the long term it is conceivable that their expense could exceed the loan amount.
1. Will our church be considered a commercial seller of electricity, by IRS, if power is sold directly to our telecom tenants? This is step ONE!
2. Will Our Church be exposed to loss of non-profit status and increased property taxation if a major revenue stream is generated from other than church donations? What is the risk? What is considered a major revenue stream for tax purposes? Can we get a formal opinion from a lawyer?
Submitted: 1 year ago.
Category: Legal
Expert:  Ely replied 1 year ago.

Hello and welcome to JustAnswer. Please note: This is general information for educational purposes only and is not legal advice. No specific course of action is proposed herein, and no attorney-client relationship or privilege is formed by speaking to an expert on this site. By continuing, you confirm that you understand and agree to these terms.

First of all, can you please clarify what you mean by "contract agreement?" What does this contract agreement specify? Do they have an easement to the church's property in order to set up their equipment there? Or what exactly is the nature of the contract?

This is not an answer, but an information request. I need this information to answer your question. Please reply, so I can answer your question. Thank you in advance.

Expert:  Ely replied 1 year ago.
Hello! Just touching base to see if you still needed an answer and if you could reply to my query. Thanks!