                                 CODE OF VIRGINIA

PROPERTY EXEMPT FROM TAXATION BY CLASSIFICATION OR DESIGNATION BY ORDINANCE
ADOPTED BY LOCAL GOVERNING BODY ON OR AFTER JANUARY 1, 2003 (§ 58.1-3651)

A. Pursuant to subsection 6 (a)(6) of Article X of the Constitution of Virginia,
on and after January 1, 2003, any county, city, or town may by designation or
classification exempt from real or personal property taxes, or both, by
ordinance adopted by the local governing body, the real or personal property, or
both, owned by a nonprofit organization, including a single member limited
liability company whose sole member is a nonprofit organization, that uses such
property for religious, charitable, patriotic, historical, benevolent, cultural,
or public park and playground purposes. The ordinance shall state the specific
use on which the exemption is based, and continuance of the exemption shall be
contingent on the continued use of the property in accordance with the purpose
for which the organization is classified or designated. No exemption shall be
provided to any organization that has any rule, regulation, policy, or practice
that unlawfully discriminates on the basis of religious conviction, race, color,
sex, sexual orientation, gender identity, or national origin.

B. Any ordinance exempting property by designation pursuant to subsection A
shall be adopted only after holding a public hearing with respect thereto, at
which citizens shall have an opportunity to be heard. The local governing body
shall publish notice of the hearing once in a newspaper of general circulation
in the county, city, or town where the real property is located. The notice
shall include the assessed value of the real and tangible personal property for
which an exemption is requested as well as the property taxes assessed against
such property. The public hearing shall not be held until at least seven days
after the notice is published in the newspaper. The local governing body shall
collect the cost of publication from the organization requesting the property
tax exemption. Before adopting any such ordinance the governing body shall
consider the following questions:

   1. Whether the organization is exempt from taxation pursuant to &#xA7; 501(c)
   of the Internal Revenue Code of 1954;

   2. Whether a current annual alcoholic beverage license for serving alcoholic
   beverages has been issued by the Board of Directors of the Virginia Alcoholic
   Beverage Control Authority to such organization, for use on such property;

   3. Whether any director, officer, or employee of the organization is paid
   compensation in excess of a reasonable allowance for salaries or other
   compensation for personal services which such director, officer, or employee
   actually renders;

   4. Whether any part of the net earnings of such organization inures to the
   benefit of any individual, and whether any significant portion of the service
   provided by such organization is generated by funds received from donations,
   contributions, or local, state or federal grants. As used in this subsection,
   donations shall include the providing of personal services or the contribution
   of in-kind or other material services;

   5. Whether the organization provides services for the common good of the
   public;

   6. Whether a substantial part of the activities of the organization involves
   carrying on propaganda, or otherwise attempting to influence legislation and
   whether the organization participates in, or intervenes in, any political
   campaign on behalf of any candidate for public office;

   7. The revenue impact to the locality and its taxpayers of exempting the
   property; and

   8. Any other criteria, facts and circumstances that the governing body deems
   pertinent to the adoption of such ordinance.

C. Any ordinance exempting property by classification pursuant to subsection A
shall be adopted only after holding a public hearing with respect thereto, at
which citizens shall have an opportunity to be heard. The local governing body
shall publish notice of the hearing once in a newspaper of general circulation
in the county, city, or town. The public hearing shall not be held until at
least five days after the notice is published in the newspaper.

D. Exemptions of property from taxation under this article shall be strictly
construed in accordance with Article X, &#xA7; 6 (f) of the Constitution of
Virginia.

E. Nothing in this section or in any ordinance adopted pursuant to this section
shall affect the validity of either a classification exemption or a designation
exemption granted by the General Assembly prior to January 1, 2003, pursuant to
Article 2 (&#xA7; 58.1-3606 et seq.), 3 (&#xA7; 58.1-3609 et seq.) or 4 (&#xA7;
58.1-3650 et seq.) of this chapter. An exemption granted pursuant to Article 4
(&#xA7; 58.1-3650 et seq.) of this chapter may be revoked in accordance with the
provisions of &#xA7; 58.1-3605.

HISTORY: 2003, c. 1032; 2004, c. 557; 2015, cc. 38, 730; 2018, c. 29; 2020, c.
1137; 2023, cc. 506, 507.