Taxing The Nonprofits


Some cities and states are moving to tax nonprofit organizations -- including churches. Nonprofit organizations and church groups are concerned about the burden of increased taxes on their activities, and about ending the traditional tax exemption of religious, educational and charitable property. Those pushing taxes and fees say that tax-free institutions like hospitals and museums should pay for city services. Others claim they should not have to subsidize services to religious groups they don't agree with.

  • Colorado voters will decide November 5th if the state should force churches and most non-profit organizations to pay property taxes -- an initiative which would raise up to $100 million.

  • In Philadelphia, 50 major non-profit groups -- mainly hospitals and universities -- have agreed to pay 40 percent of what their property tax would be if they had not been exempted.

  • In Maine, a state commission this year proposed allowing cities to charge fees to most non-profits -- excluding those that serve the poor.

  • In Buffalo, New York -- where 47 percent of property is tax-exempt -- a fee for garbage pickup is now in effect for all groups, including churches.
The tax movement is strongest in East Coast and Rust Belt cities where budgets are strained by the exodus of middle-class taxpayers, the growing number of tax-exempt properties and the disappearance of federal and state aid.

Source: Mark Potok, "Local Governments Taking Steps to Make Nonprofit Groups Pay Taxes," and "Colorado Measure Scares Nonprofits," both USA Today, October 11, 1996.

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