Yesterday it was mentioned that here in Washington, many of our Lodges have successfully been able to become exempt from some or all of their property tax liability, thus making their Masonic Temples more financially viable.
Using made up numbers, just so that things are easily understood, let’s assume that the property taxes on our Masonic Temple are 1000 dollars per year.2
I think we assume that if we successfully argue to have our Temple exempted from those taxes, that the Governmental bodies set to receive those 1000 dollars will just get 1000 dollars less. That by us not being required to pay, Government’s income goes down.
But that is now how the system works.
How it actually works is that Government sets out to collect X number of dollars, and then divides X by the value of all property within its taxing area in order to determine the amount that each property owner will pay.
So again, trying to keep the numbers simple, let’s assume that there are 1000 pieces of property within our taxing district, all valued at the exact same amount, so each is paying (just like our fictional Masonic Temple) 1000 dollars per year.
Government is collecting 1 million dollars per year. 1000 pieces of property x 1000 per year per piece.
Then we receive an exemption for our Masonic Temple.
By granting us that exemption, government income does not suddenly become 999,000 dollars.
Rather the government holds its income at 1 million dollars because it shifts our former tax burden on to everyone else. Now, since our Temple is no longer being taxed, all of the other properties must pay more. In our simple math example, everyone else now pays 1001.01 dollars instead of 1000 dollars.3
So we, the Masons are no longer having to pay property taxes, because the single mother down the street is paying them for us.4
This shift is my concern. It is why I have always encouraged my own Lodge to not seek an exemption.
As Masons, I think that we have a duty to be of benefit to our communities. My personal feeling is that if we receive an exemption, because of how the system works, we instead become a detriment.
But I know that lots of Masons, good Masons, disagree with me.
So let’s chat about it. Should Masonic Lodges seek tax advantages or exemptions?
As we are using artificially small dollar amounts and parcel numbers the math does not work perfectly, but you get the idea, and with larger numbers reflective of reality, it does work perfectly.
I know that most people’s perception of how property taxes in Washington work is different from what I’ve described here. Please know that I base this knowledge off the fact that I worked for the largest property tax levying body in Washington for almost 20 years, and have served as the chief executive of a property tax levying government. This is how it works in Washington State.
The reason for the exemptions for fraternal societies, houses of worship, etc. is the fact that their members pay their own residential and/or commercial property tax assessments while these exempt groups give the community a social life.
Many ways of looking at this that must be taken into account.
1. We are in the business of education and teaching men esoteric gnosis through Rituals, Symbols and Allegories. Not religious but arguably spiritual.
2. To teach these lessons we as men of the Craft must meet in a hall or temple.
3. Buildings cost money.
4. Very few lodges are in the money making business, rather we are in the Upright Man and Mason making business.
If we use your example of lodges that should possibly be required to pay taxes that they can not pay then the Masonic Work that is going on thorough out the world would substantially stop because lodges would not be able to pay for their temples.
These communities would have less men of high ethics and morals.
Our communities would suffer.
Multiple sides to this two sided coin.
My lodge has renters and we pay taxes. Without renters we would have no lodge and my home town would be doing zero Masonic Work.
The public use tax exemption requires us to show that we have x uses per year of our Lodge building, for public (non-Masonic) purposes.
Jump through a few hoops, fill out a few forms, and the tax man will lower our tax burden to acknowledge the public (rather than just Masonic) benefit we provide to the community.
Or, to put it another way, we can quite properly put our buildings in a lower-tax category.
Focus on the Lodge: get the exemption. Lower the tax burden.
Focus on the community: think first of the consequences of shifting that tax burden.
One of my plans for the new year is to have my Lodge consider the exemption. When we do, now we’ll have a deeper discussion.
We provide benefits beyond just dollars. We try and make men pillars of the community.
The vast majority of lodges also raise money for the community for charity, scholarships, feeding the homeless, food banks, clothing drives, backpacks for kids, bikes for books, etc.
Moneys spent on building maintenance goes back into the state coffers via business taxes, employee salaries, sales taxes, etc. The building doesn’t exist in a vacuum.
Money spent on the meals is taxed. Money spent on suits and ties, flowers, hotels and convention centers, booze (!!!), ice…I could go on but you probably get my point.
Finally, if the state is going to truly miss the money gained via taxing our lodge buildings, when they have a 70 billion dollar budget, something is seriously wrong. And if they did feel the need to take those taxes, they would remove that exemption - which in this state wouldn’t surprise me one bit.
Especially in this state I do not weep for their tax problems.
My experience in dealing with tax exemptions in Washington State as an attorney for 27 years is confirmed by your explanation MWB. My lodge applied for a public use exemption which was denied soon before I was raised. Having reviewed the criteria today I still see insufficient basis for my lodge to qualify. The laundry list of exemptions has a sound basis. IMO lodges that properly qualify have an obligation to apply for the exemption(s) under which they qualify. But those lodges that don’t meet the criteria shouldn’t waste their time and government agency time applying and hoping for relief. The reason for exempting houses of worship is separation of church and state along with the assumption that the primary use of their assets is charitable. I am not aware of a fraternal society exemption in the property tax statute.
Being someone who took on the pain stacking process of getting my lodge tax exempt. This is a very valuable thing to do, not only for your lodge but for the brothers and future brothers of that lodge. When I started the process I made alot of phone calls to the Department of Revenues to make sure we were able to do this. So after that I sat down and figured out that we do put out a significant amount of money between upkeep and general maintenance of the building. I also had to show that there is usage of 50% public use and 50% private use. So once again I made more calls and found out that public use is defined by the department of revenue as any public gathering that the public in general can walk through our doors and see what is going on. Meaning that for the lodge any event that is declared "open" is considered a public use gathering. Closed events such as degree work and what not are considered private use. This also applies to any of the other bodies that may use tour lodge. So while building the application I had to recreate a whole bunch of documents that were never created in the first place such as rental agreements to thel odge and OES that pay rent and use agreement to the youth groups. Along with a rental contract for the car club that is on a longterm rental with us. So after all that as done, I finally submitted the application and had to wait with patience to find out if I got approved or not. Well everything but our paved parking lot which is not that much in property taxes. And we rent it out to the county for their overflow parking for the court house. So by doing this it has opened my fellow lodge brothers to become more invested in the lodge and Masonry without having to worry about the not having enough to pay the property taxes and losing the building. I have also helped another lodge get property tax exempt and they were in worse financial state then my lodge and if they did not get it they would have had to make some hard choices about the future of their building. Before all of this my lodge went through the board of equalization and that is only a band aid for a bleeding artery, it does not last forever and once the time frame ends your property taxes go back to what any adjusted rate for that tax year would be. This is something that has become a passion of mine and I would gladly help any lodge in this state become tax exempt the proper way through the department of revenue. Just reach out and ask me.
Under the laws of our nation tax avoidance is legal, tax evasion is not. If there's a provision in the tax law that allows us to avoid taxes we're nothing less than good law abiding citizens when we avail ourselves of the tax benefit.
Ethically I'm very comfortable with Masons being exempt from both property and income taxes. I'm also extremely uncomfortable ... no, strike that ... repulsed that certain organizations qualify for tax exempt status. For example, the NFL, an club made up of billionaires who solicit cities and states for public funding of their stadiums. Also, many Blue Cross/Blue Shield health plans. Premera, a qualified not-for-profit organization that annually imposes double-digit premium increases on its subscribers pays its CEO $5 million annually (you can look it up).
Both the NFL and Premera are acting legally but not ethically. We Masons, on the other hand, are legal and ethical. Before we question the validity of our tax exemptions let's address the unethical use of our nation's tax laws.
Properly operate is interesting to me. What is properly operating mean for your lodges situation? If lodge building is paid off the rent should take care of the taxes and wear and tear etc for maintenance. Just curious. During my tenure as WM this year i created a committee for the express purpose of addressing the age of our building, size and cost to upgrade issues. Instead of selling and making a huge profit then building a building that better suits our needs the lodge decided to stay in our old building. I think it is the wrong decision but I am only one person.
There's a reason that the tax code in Washington is written in the manner that it is. When it comes to taxes, that's Gov. Jay Inslee's solution to everything...tax it more. For years, Washington has operated with a multi-billion dollar tax surplus. That gets used for frivolous spending on climate change studies, Inslee's failed presidential campaign, meanwhile teacher's unions continue to give themselves raises and schools fall into physical disrepair....which results in another bond levy being passed, you know, "for the kids". There is no responsible property management and no accountability for those who do little more than take up a 6-figure line item expense on a budget sheet. When those folks mismanage things, committees need to be formed to do studies, at the taxpayers' expense. Then a problem gets identified - made-up or otherwise - and another committee and multiple studies need to be conducted to schedule a meeting to have a conversation about thinking about forming another committee to contemplate solving a problem that we already know exists.
Speaking of tax revenue, how much did WA get fleeced by Nigerian scammers for unemployment/COVID relief? Where did that $650 million go? There's legislation on the table to give incarcerated people minimum wage....yes, you get paid to go to jail.
With the insane amount of financial ass-clownery going in in WA State government (don't get me started on the Biden administration), I'll gladly pay a little tax as possible. WA State "leadership" is not 'For the people', they are about grabbing power and creating voters who are dependent on the government because those folks are easiest to control.
The reason for the exemptions for fraternal societies, houses of worship, etc. is the fact that their members pay their own residential and/or commercial property tax assessments while these exempt groups give the community a social life.
Jay
I did-not-know-this.
This is a deep one.
Many ways of looking at this that must be taken into account.
1. We are in the business of education and teaching men esoteric gnosis through Rituals, Symbols and Allegories. Not religious but arguably spiritual.
2. To teach these lessons we as men of the Craft must meet in a hall or temple.
3. Buildings cost money.
4. Very few lodges are in the money making business, rather we are in the Upright Man and Mason making business.
If we use your example of lodges that should possibly be required to pay taxes that they can not pay then the Masonic Work that is going on thorough out the world would substantially stop because lodges would not be able to pay for their temples.
These communities would have less men of high ethics and morals.
Our communities would suffer.
Multiple sides to this two sided coin.
My lodge has renters and we pay taxes. Without renters we would have no lodge and my home town would be doing zero Masonic Work.
My 2c
Interesting observation as always, MW.
The public use tax exemption requires us to show that we have x uses per year of our Lodge building, for public (non-Masonic) purposes.
Jump through a few hoops, fill out a few forms, and the tax man will lower our tax burden to acknowledge the public (rather than just Masonic) benefit we provide to the community.
Or, to put it another way, we can quite properly put our buildings in a lower-tax category.
Focus on the Lodge: get the exemption. Lower the tax burden.
Focus on the community: think first of the consequences of shifting that tax burden.
One of my plans for the new year is to have my Lodge consider the exemption. When we do, now we’ll have a deeper discussion.
Very interesting, MW, thank you.
We provide benefits beyond just dollars. We try and make men pillars of the community.
The vast majority of lodges also raise money for the community for charity, scholarships, feeding the homeless, food banks, clothing drives, backpacks for kids, bikes for books, etc.
Moneys spent on building maintenance goes back into the state coffers via business taxes, employee salaries, sales taxes, etc. The building doesn’t exist in a vacuum.
Money spent on the meals is taxed. Money spent on suits and ties, flowers, hotels and convention centers, booze (!!!), ice…I could go on but you probably get my point.
Finally, if the state is going to truly miss the money gained via taxing our lodge buildings, when they have a 70 billion dollar budget, something is seriously wrong. And if they did feel the need to take those taxes, they would remove that exemption - which in this state wouldn’t surprise me one bit.
Especially in this state I do not weep for their tax problems.
My experience in dealing with tax exemptions in Washington State as an attorney for 27 years is confirmed by your explanation MWB. My lodge applied for a public use exemption which was denied soon before I was raised. Having reviewed the criteria today I still see insufficient basis for my lodge to qualify. The laundry list of exemptions has a sound basis. IMO lodges that properly qualify have an obligation to apply for the exemption(s) under which they qualify. But those lodges that don’t meet the criteria shouldn’t waste their time and government agency time applying and hoping for relief. The reason for exempting houses of worship is separation of church and state along with the assumption that the primary use of their assets is charitable. I am not aware of a fraternal society exemption in the property tax statute.
Being someone who took on the pain stacking process of getting my lodge tax exempt. This is a very valuable thing to do, not only for your lodge but for the brothers and future brothers of that lodge. When I started the process I made alot of phone calls to the Department of Revenues to make sure we were able to do this. So after that I sat down and figured out that we do put out a significant amount of money between upkeep and general maintenance of the building. I also had to show that there is usage of 50% public use and 50% private use. So once again I made more calls and found out that public use is defined by the department of revenue as any public gathering that the public in general can walk through our doors and see what is going on. Meaning that for the lodge any event that is declared "open" is considered a public use gathering. Closed events such as degree work and what not are considered private use. This also applies to any of the other bodies that may use tour lodge. So while building the application I had to recreate a whole bunch of documents that were never created in the first place such as rental agreements to thel odge and OES that pay rent and use agreement to the youth groups. Along with a rental contract for the car club that is on a longterm rental with us. So after all that as done, I finally submitted the application and had to wait with patience to find out if I got approved or not. Well everything but our paved parking lot which is not that much in property taxes. And we rent it out to the county for their overflow parking for the court house. So by doing this it has opened my fellow lodge brothers to become more invested in the lodge and Masonry without having to worry about the not having enough to pay the property taxes and losing the building. I have also helped another lodge get property tax exempt and they were in worse financial state then my lodge and if they did not get it they would have had to make some hard choices about the future of their building. Before all of this my lodge went through the board of equalization and that is only a band aid for a bleeding artery, it does not last forever and once the time frame ends your property taxes go back to what any adjusted rate for that tax year would be. This is something that has become a passion of mine and I would gladly help any lodge in this state become tax exempt the proper way through the department of revenue. Just reach out and ask me.
Under the laws of our nation tax avoidance is legal, tax evasion is not. If there's a provision in the tax law that allows us to avoid taxes we're nothing less than good law abiding citizens when we avail ourselves of the tax benefit.
Ethically I'm very comfortable with Masons being exempt from both property and income taxes. I'm also extremely uncomfortable ... no, strike that ... repulsed that certain organizations qualify for tax exempt status. For example, the NFL, an club made up of billionaires who solicit cities and states for public funding of their stadiums. Also, many Blue Cross/Blue Shield health plans. Premera, a qualified not-for-profit organization that annually imposes double-digit premium increases on its subscribers pays its CEO $5 million annually (you can look it up).
Both the NFL and Premera are acting legally but not ethically. We Masons, on the other hand, are legal and ethical. Before we question the validity of our tax exemptions let's address the unethical use of our nation's tax laws.
Properly operate is interesting to me. What is properly operating mean for your lodges situation? If lodge building is paid off the rent should take care of the taxes and wear and tear etc for maintenance. Just curious. During my tenure as WM this year i created a committee for the express purpose of addressing the age of our building, size and cost to upgrade issues. Instead of selling and making a huge profit then building a building that better suits our needs the lodge decided to stay in our old building. I think it is the wrong decision but I am only one person.
There's a reason that the tax code in Washington is written in the manner that it is. When it comes to taxes, that's Gov. Jay Inslee's solution to everything...tax it more. For years, Washington has operated with a multi-billion dollar tax surplus. That gets used for frivolous spending on climate change studies, Inslee's failed presidential campaign, meanwhile teacher's unions continue to give themselves raises and schools fall into physical disrepair....which results in another bond levy being passed, you know, "for the kids". There is no responsible property management and no accountability for those who do little more than take up a 6-figure line item expense on a budget sheet. When those folks mismanage things, committees need to be formed to do studies, at the taxpayers' expense. Then a problem gets identified - made-up or otherwise - and another committee and multiple studies need to be conducted to schedule a meeting to have a conversation about thinking about forming another committee to contemplate solving a problem that we already know exists.
Speaking of tax revenue, how much did WA get fleeced by Nigerian scammers for unemployment/COVID relief? Where did that $650 million go? There's legislation on the table to give incarcerated people minimum wage....yes, you get paid to go to jail.
With the insane amount of financial ass-clownery going in in WA State government (don't get me started on the Biden administration), I'll gladly pay a little tax as possible. WA State "leadership" is not 'For the people', they are about grabbing power and creating voters who are dependent on the government because those folks are easiest to control.