"Taxing" Nonprofits: A Growing Interest

The NY Times featured a recent story about the growing trend of municipalities developing or charging nonprofits service fees (aka taxes on certain services). Clearly this is a challenge for most nonprofits, especially as they struggle to address increasing needs, higher operating costs and decreasing funding and donations. It seems that nonprofits will likely cut services in response, especially since most have already cut everything possible in an attempt to preserve programs and services. What kind of impact this will have remains to be seen, but it feels like watching a train wreck in slow motion.

The article relates:
As recession-racked cities struggle to balance their budgets with everything short of feeling behind sofa cushions for loose change, a growing number are seeking more money — just don’t use the word taxes — from nonprofit institutions that occupy valuable land but by law do not pay property taxes.

Boston has been sending letters to its largest nonprofit institutions this year, telling them the value of their land and asking them to begin making annual payments that would eventually rise to a quarter of what they would owe if they paid property taxes. Mayor-elect Rahm Emanuel of Chicago wants the city to begin charging water fees to nonprofits, which have been spared them in the past. And the mayor of Providence, R.I., Angel Taveras, cited Boston’s example this month when he called on nonprofits to pay more money to the city.

Read more here.