Property used for free museums is exempt by the Constitution (Section 3(d) of Article XIII of the California Constitution). Museums that charge admission may qualify for the Welfare Exemption.
Free Museum Exemption
The Free Museum Exemption is available to property used for museums that are free and open to the general public (see Revenue and Taxation Code section 202 and Section 3(d) of Article XIII of the California Constitution).
The museum must be open to the general public on a regular basis, and the public must be made aware that such is the case. Thus, there should be a sign on the property indicating the museum is open to the general public on a regular, scheduled, ongoing basis.
The property may be owned or leased, but it must be used for museums as of the January 1 lien date. For purposes of this exemption, museum is defined as a building that the predominant purpose is to house and display objects of lasting value. The Free Museum Exemption applies only if all of the following conditions are satisfied:
- Admittance to the museum is free; however, if donations are requested, the exemption is still allowed so long as no one is denied admission for failing to make a donation.
- The museum must be used primarily as such, although other uses for meetings, receptions, or a gift shop on the premises that sells museum related items and snacks for the convenience of patrons does not disqualify the exemption.
- The property must be regularly open to the public with regularly scheduled hours.
- The property must be identifiable as a museum with the public being made aware of the use and hours by signs and perhaps advertising such as in newspapers, promotional materials, and/or the telephone book's yellow pages.
To apply for the Free Museum Exemption, a claim form must be filed each year with the assessor of the county where the property is located. The claim form, BOE-268-B, Exemption for Property Used by a Free Library or Free Museum, is available from the county assessor (or claim form BOE-263, Lessor's Exemption Claim, if the property is leased). To receive the full 100 percent exemption for property owned or leased on the January 1 lien date, the claim must be filed by February 15.
The following links provide additional information on the Free Museum Exemption:
Museums that charge admission may qualify for the Welfare Exemption. Property used exclusively for the charitable purposes of museums and owned and operated by a qualifying organization is specifically declared eligible for the Welfare Exemption in Revenue and Taxation Code section 214.14
- Property used exclusively for the charitable purposes of museums includes property used for activities and facilities related to the primary charitable purpose of museums and reasonably necessary and incidental to those purposes.
- Property is not required to be indispensable to the primary charitable purposes of museums.
- Property is not used exclusively for the charitable purposes of museums if it is used for activities and facilities not related to the primary charitable purposes of museums and not reasonably necessary or incidental to those purposes.
- Property used exclusively for the charitable purposes of museums includes property owned by a nonprofit association or organization performing auxiliary services to any city or county museum in the state and used for the storage of items donated for an annual rummage sale. The storage of such items is not considered a "fundraising activity" as used in Revenue and Taxation Code section 214(a)(3) and the proceeds, after expenses, from the sale of these items must be used to provide support to those museums.
- Welfare Exemption