Every state exempts some or all of the properties owned by charitable nonprofits from property taxes. However, despite a lack of legal authority to do so, some municipalities attempt to impose discriminatory taxes or fees on nonprofits, or demand so-called “voluntary” payments in lieu of taxes (PILOTs). Different jurisdictions call the assessment different terms – taxes, fees, or PILOTs – but the goal is the same, to divert nonprofit resources away from mission and into government coffers.

Nonprofit Fees

• North Dakota: The Jamestown, North Dakota City Council is considering a new stormwater fee [1] to be applied to all properties, including property owned by nonprofits, churches, parks, and governments. The City itself would be expected to pay $3,150 per month under the proposed plan. The new fee would be assessed based on the size of the commercial property and $3 per month for residential. The ordinance creating the stormwater utility fee program passed unanimously on July 1, but the resolution adopting the fee structure has yet to be adopted. (7/15/2019)
• South Carolina: The City Council for Columbia, South Carolina, reportedly is considering a number of measures to overcome a potential multimillion-dollar shortfall in next year’s budget, including imposing fees on nonprofits [2]. The state constitution prohibits imposing property taxes on nonprofits, so local lawmakers are considering changing the city’s business license ordinance to remove exemptions for nonprofits. (6/3/2019)

Additional Resources

• From the Fault Line on Nonprofit Property-Tax Exemptions, [3] David L. Thompson, National Council of Nonprofits Blog, February 9, 2015.
• How Will Chicago’s New Water Fees Impact Your Nonprofit [4], Donors Forum (2013)
• The Charitable Property-Tax Exemption and PILOTs [5], Urban Institute (2012)
• Squeezed Cities Ask Nonprofits for More Money [6], New York Times (2011)