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  Nonprofit organizations benefit from tax exempt status granted by the federal government. However, the federal government only grants exemption from income tax. Individual states are responsible for regulating exemption from sales and property taxes. Because this power is delegated to state governments, requirements that nonprofits must satisfy greatly vary. Two conditions that nonprofits in most states must satisfy include ownership and use.
  
  

Nonprofit Ownership

• Thirty-nine states require a nonprofit organization to own the property to qualify for property tax exemption. The only states that do not are Arkansas, Connecticut, Georgia, Iowa, Mississippi, Nevada, New Hampshire, New Mexico, Ohio, Oklahoma and West Virginia.
  
  Of the states that do require property ownership, 36 also require that the nonprofit have 501(c)3 status. However, nonprofit ownership cannot, alone, satisfy the requirement for property tax exemption. States that require nonprofit ownership also require that the property be used for a charitable purpose.
  
  

Charitable Use

• All 50 states require a property to be used for a charitable purpose to qualify for tax exempt status, including the 39 states that require nonprofit ownership to qualify as well. While this is the main condition used to determine tax exemption for nonprofits, few states define charitable purpose. Of those states that do define it, most indicate the following as the main characteristics: the organization's efforts involve public benefit, it relieves the government of a burden, it provides a relief of poverty and its income is generated primarily from donations.
  
  

Tax Assessment

• When a nonprofit organization owns property and a portion of it is used by a for-profit entity, as with churches that provide space for a childcare center or gift shops in a nonprofit hospital, 31 states assess the property taxes separately, charging only for the leased for-profit portion. These include states like Alaska, Florida, Louisiana, Montana, New York, Texas and Wisconsin.
  
  Sixteen states do not have regulations regarding separate assessments, such as California, Kansas, Maryland, Tennessee and Wyoming. Additionally, only 17 states exempt property tax if a nonprofit is using space within a for-profit-owned property. These include states like Hawaii, Massachusetts, Oregon and South Carolina.