The Ad Valorem Exemption

The choice by the Sarasota County property appraiser’s office to challenge the ad valorem exemption of several arts and cultural not-for-profit organizations opens a potential “pandora’s box” for all Sarasota County not-for-profits in all service sectors.

The Arts and Cultural Alliance of Sarasota County acts as the source, voice, and advocate for arts and culture in our community. In this role, we state our full and unequivocal support for Marie Selby Botanical Gardens and Historic Spanish Point, Florida Studio Theatre, the Sarasota Opera, Mote Marine Laboratory & Aquarium, the Conservation Foundation of the Gulf Coast, Manasota Matters Inc., and others to have continued organizational exemption from ad valorem property taxes in Sarasota County under which they have been operating for decades.

Our support for these organizations is grounded in the following:

  • These organizations have not changed the use of their properties for which the exemption was originally granted.
  • The statute governing ad valorem tax exemption has not been changed by the Florida legislature that created it.
  • Not-for-profit organizations in social sectors use some degree of exclusive vendor status with commercial entities to provide professional services. Many of these contracts have existed for decades and are consistent with “best practice” policy in not-for-profit administration.
  • The Property Appraiser’s challenge to the organizational exemption from ad valorem property taxes is a new interpretation of the statute, overturning long established precedent.
  • The Property Appraiser’s choice to reinterpret and overturn the long-established, best practice exemption comes at a unique moment in history when these organizations are already threatened by the financial impact of the global pandemic on their businesses.
  • Overturning the “best practice” precedent of exclusive commercial contracting for on-site activities threatens the ad valorem exemption status of at least 20 other cultural not-for-profits throughout the State of Florida.
  • Overturning the “best practice” precedent of exclusive commercial contracting for on-site activities threatens any use of the exempt property in contractual partnership with any commercial for-profit enterprise. Scenic and costume studios may no longer contract with commercial entertainment businesses for example without losing their exemption for the portion of the property used for that activity.  This includes local film and video location shoots; theme parks, entertainment corporations such as Feld Entertainment, and commercial theatre such a Broadway plays and musicals – all of which are for-profit, commercial entities. All Sarasota professional cultural organizations have had, currently have, or may have in the future, the opportunity to earn revenue using their properties and/or facilities in contractual relationships with commercial, for-profit entertainment entities. The contractual relationships our organizations with the professional craft unions
  • Social and human service not-for-profit organizations such as The Haven use contractual relationships with for-profit entities to provide on-site piece-work employment for their clients.
  • Activities such as on-site food and beverage service and event catering enlarge the circle; exposing more people to the organization, increasing potential ticket and admission buyers, and ultimately creating new donors.

The Sarasota arts and cultural community consists of over 100 organizations collectively responsible for 7,500 full time jobs and contributing $ 300 million to the Sarasota/Manatee economy. By every measure Sarasota’s arts and cultural community leads the state and the southeast in both the quality and the per capita quantity of arts and cultural not-for-profits.

Not-for-profits across all sectors provide essential, accessible services to the entire community. In particular, the Sarasota/Manatee community distinguishes itself from other Florida and Southeastern communities with the breadth and quality of its cultural life. This robust sector raises property values, inspires tourism, and employs thousands of people both within the organizations and in the community-based commercial goods and services sectors the organizations use in pursuit of their missions.

We must make the point that there is no “profit” in not-for-profit. When a not-for-profit entity reaps revenue in excess of expenses, the excess is reinvested into the organization. No single person, owner, or investor reaps the benefit. The beneficiary of revenue in excess of expenses is the community served by the organization.

Financial support for not-for-profit entities is challenging in the best of times and organizations are constantly challenged to find new ways to generate revenue to compliment the community’s philanthropic generosity. Not-for-profits use their inherent innovative spirit to uncover untapped and/or underused resources of their properties, facilities and dedicated, creative employees to generate new sources of income for the singular purpose of providing affordable, accessible benefits to our community.

The Sarasota County government has always been a strong partner and ally of arts and culture in the county, for the greater good of the community. The Arts and Cultural Alliance of Sarasota County is grateful for and proud of this relationship and understands that this partnership is one reason we have the robust cultural life that benefits our community. We stand ready to facilitate a dialogue with the County Property Appraiser’s office regarding this issue while standing firmly behind our member organizations and supporting all not-for-profit organizations who are threatened by this new challenge.

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