Taxes, Fees, and PILOTs (Payments in Lieu of Taxes)

Why It Matters to Nonprofits

The nonprofit community recognizes the budget challenges that state and local governments are facing; we experience them every day. Like governments, nonprofits are struggling to maintain services to their communities. In so doing, they earn their tax exemptions every day. Governments cannot impose new taxes and fees on nonprofit organizations without diminishing the impact that the nonprofits have in their communities. As a nonprofit leader in Minnesota said, "Nonprofits have tax exemption for a reason — they provide service to the community that lessens the burden on government. We are partners with government and the community. But as these additional fees and assessments get assigned, it comes out of our donated dollars and resources." Below is a list of challenges to the work of nonprofits across the US. For even more up-to-date information on taxes, fees, and PILOTs, view the newest edition of Nonprofit Advocacy Matters.

Current Issues:

Read about how taxes, fees, and PILOTs are affecting nonprofits across the United States.

1. Taxes 
2. Fees
3. PILOTs

Council of Nonprofits Special Report: State Budgets Threaten Nonprofits

As state governments across the country grapple with severe budget deficits, many are placing extraordinary burdens on nonprofits. The National Council of Nonprofits released a special report, State Budget Crises: Ripping the Safety Net Held by Nonprofits, documenting how states are delaying contract payments to their nonprofit partners, slashing funds for essential programs, and imposing new fees and taxes on 501(c)(3) organizations. The report encourages leaders of governments, foundations, and nonprofits to work together to address challenges posed by state budget crises.

What Nonprofits Can Do

Find your State Association and get involved to address these and other developing issues in your state. Tell your organization’s story and explain the impact that losing your tax exemption would have on your ability to meet your mission.