LOWELL — Nonprofit organizations across the state may be required to pay taxes on properties they acquire if an amendment by state Rep. David Nangle passes in the Senate.
Currently, if a nonprofit organization purchases real estate, the city or town loses the ability to collect tax revenue on that property.
“It’s a real burden on the individual city and town, but most importantly, it becomes a burden on the taxpayers in that city and town,” said Nangle, a Lowell Democrat. “Inevitably, the taxpayers are going to have to pick up the slack.”
Nangle’s amendment, which has been adopted by the House as part of an economic-development bond bill, proposes that nonprofits and other charitable organizations that are exempt from property taxes are required to pay those taxes on a “sliding scale.”
If Nangle’s amendment passes in the Senate, those organizations would have to pay property taxes over the course of four years after the property has been purchased. They would have to pay 100 percent of property taxes for the first year, 75 percent for the second year, 50 percent for the third year, and 25 percent for the fourth and final year.
The four-year period of taxation seemed like “a fair and equitable way to do it,” Nangle said.
UMass Lowell recently purchased the Perkins Park residential mill development, which city officials were not made aware of in advance. Because of the purchase, the city stands to lose $321,000 in tax revenue. The Sun previously reported that the university would have paid approximately $1.9 million in property taxes for fiscal year 2015 if it had the same tax rates as the average property owner for all of its properties.
Although UMass Lowell purchased the property legally, Nangle and other city officials were upset upon learning about the Perkins Park purchase, which has 270 units.
Nangle said what bothers him is that tax revenue can vanish from a city or town without input or a vote from city and town officials. However, the university has agreed to pay the $321,000 in taxes to the city for next year. The university said it has also contributed to the city by paying about $75,000 annually in hotel and meal taxes from the Inn & Conference Center.
“We’ve heard the university’s side in what they give back in lieu of taxes. I admit they give back their fair share. There’s no doubt about that,” Nangle said. “I’m just looking to protect the taxpayers in the city of Lowell, but this is something that is going to go on around this state.”
Upon writing the amendment, Nangle said he has received overwhelming support from his colleagues. He expects the Senate to review the amendment sometime next week.
“If the Senate puts it in, then it’s automatically in there,” Nangle said. “If not then it will go to conference committee and I will work with House leaders to make sure it’s inserted in the bill.”
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