14/11/2007 - 14:38

Rates exemptions for charities to be scrutinised: WALGA

14/11/2007 - 14:38

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Some charitable organisations in Western Australia could be forced to pay rates to Local Governments after the Supreme Court overturned a rates exemption decision by the State Administrative Tribunal.

Some charitable organisations in Western Australia could be forced to pay rates to Local Governments after the Supreme Court overturned a rates exemption decision by the State Administrative Tribunal.

The Shire of Derby/West Kimberley won its appeal to the charitable status rates exemption granted to the Yungngora Association, which is an income tax exempt charitable entity, for land operated by the Noonkanbah Pastoral Company.

WA Local Government Association president Bill Mitchell, who contriuted funds to the Shire's case, said the exemption was wrong because the land was not used exclusively for charitable purposes.

Cr Mitchell said the Supreme Court decision was likely to have ramifications across Local Government in relation to groups that claimed rates exemptions based on charitable status.

"What this decision does is provide a basis for Councils to recognise the commercial reality of groups and organisations that claim charitable rates exemptions," Cr Mitchell said.

"This does not mean that all organisations with charitable status from the Commissioner of Taxation will now have to pay rates but it will mean that those with commercial aspects to their operations will be more closely scrutinised."

Cr Mitchell said that it was important that everyone who should be paying rates should be required to meet their obligations to the community.

 

 

 

The full text of a WALGA announcement is pasted below

The rejection of the use of charitable status for a rates exemption by the Supreme Court is likely to have ramifications across Local Government.

On behalf of its members, the WA Local Government Association contributed funds to help the Shire of Derby/West Kimberley appeal a decision by the State Administrative Tribunal to grant a rate exemption to the Yungngora Association.

The Yungngora Association, which is an income tax exempt charitable entity, had secured a charitable status rates exemption by the SAT for land operated by the Noonkanbah Pastoral Company which in 2005 had gross income from cattle sales in excess of $400,000.

WALGA President Cr Bill Mitchell said the SAT ruling which granted the rates exemption was ruled in error by the Supreme Court in that it concluded that the land was used exclusively for charitable purposes.

Cr Mitchell said the Supreme Court decision was likely to have ramifications across Local Government in relation to groups that claimed rates exemptions based on charitable status.

"What this decision does is provide a basis for Councils to recognise the commercial reality of groups and organisations that claim charitable rates exemptions," Cr Mitchell said.

"This does not mean that all organisations with charitable status from the Commissioner of Taxation will now have to pay rates but it will mean that those with commercial aspects to their operations will be more closely scrutinised."

Cr Mitchell said that it was important that everyone who should be paying rates should be required to meet their obligations to the community.

"That is the core reason why the Association decided to assist the Council with their appeal, it is a case about fairness and ensuring that other ratepayers are not carrying the liability of others," he said.

"There is a serious issue of sustainability of Councils in WA which the Association is working to redress with the Systemic Sustainability Study project and this action fits with that objective."

Ends

 

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