How Does a VFD “Qualify” for Government Leasing Rates?
Under IRS rules a volunteer fire department must be a non-profit corporation (a 501c3) AND can use very low tax exempt-municipal leasing rates to acquire new or used fire trucks (“equipment that puts out fires”) and/or fire houses or fire stations new or renovated) — but nothing else)
To be IRS “qualified,” the Volunteer Fire Department must have the following:
A written agreement to provide firefighting services with the city/town/county it services, and;
Be the only provider of firefighting services in that area OR have provided fire-fighting services continuously since 1981. (Even if there is another firefighting group that covers the same area, your VFD can still qualify if it has been operating since 1981.
If the volunteer fire department is qualified as described above, the IRS further requires that the VFD to also provide the following:
1. Publish a notice in a local newspaper and have a meeting no sooner than 14 days later to allow any person opposed to the purchase to have an opportunity to be heard, and;
2. Provide “proof publication” (copy of the newspaper notice)
3. Provide a resolution by the government entity confirming that the Volunteer Fire Department provides fire-fighting services for them.
4. Provide a copy of the VFD’s agreement with the government entity (city/county/town) to provide firefighting services (if available).
5. Provide a resolution from the VFD confirming that the lease purchase was formally authorized at a meeting and the official title of the person(s) authorized to sign the lease agreement on behalf of the Fire Department[/expand]
Complete detailed instruction and suggested wording are include with VFD municipal leasing application. There are several steps to the qualification process (it is the IRS, after all); but the interest rate savings over a period of years can be very substantial if your VFD qualifies.
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NOTE: We only offer municipal leasing options on VFD transactions over $125,000. Other programs available for transactions under $125,000.