National Council of Nonprofits
Published on National Council of Nonprofits (https://www.councilofnonprofits.org)

Home > Nonprofit Fees

Nonprofit Fees

Submitted by cnp_admin on Tue, 01/13/2015 - 9:52pm

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 demanding 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

  • Delaware (2014): The city of Lewes considered a proposal to eliminate local nonprofits’ exemptions [1] from certain rental fees, including those charged for renting spaces at libraries parks, and beaches. A decision on the proposal was delayed to give the public more time to consider the issue.
  • Maine (2014): Legislation was proposed that would have authorized municipalities to impose service charges [2] on tax-exempt properties owned by certain nonprofit organization.
  • Minnesota (2014): Proposed legislation would have granted municipalities authority to establish street improvement districts [3] and assess "street improvement fees” for businesses, including nonprofits.  The legislation was not enacted, but a newer version will most likely exempt most property tax-exempt nonprofits.
  • Illinois (2012): Chicago Mayor Rahm Emanuel received national attention for working to revoke waivers that exempted city nonprofits from paying water fees [4]. The effort was seen by some city and county officials elsewhere as a sign that nonprofit resources were becoming fair game to fill budget holes. Nonprofits, led by Donors Forum [5] and others, correctly pointed out that the amounts charged for water fees exceeded costs and were essentially a tax on tax-exempt entities. In response to pressure, the Mayor is now offering a compromise that would reinstate water fee exemptions for nonprofits with net assets of less than $1 million and phases in discounts of 60 percent for nonprofits with between $1 and $10 million in assets and 25 percent for nonprofits with between $10 and $250 million in assets. Museums would maintain a 20 percent exemption regardless of net asset level. Religious leaders in Chicago remain dissatisfied with the Mayor’s offer and are pushing for a broader reinstatement [6] of the exemptions.

Additional Resources

  • "From the Fault Line on Nonprofit Property-Tax Exemptions," [7] David L. Thompson, National Council of Nonprofits Blog, February 9, 2015.
  • How Will Chicago’s New Water Fees Impact Your Nonprofit [8], Donors Forum (2013)
  • The Charitable Property-Tax Exemption and PILOTs [9], Urban Institute (2012)
  • “Squeezed Cities Ask Nonprofits for More Money [10],” New York Times (2011)
  • State Budget Crises: Ripping the Safety Net Held by Nonprofits [11], National Council of Nonprofits (2010)
Categories: 
State & Local Policy Issues [12]
Tags: 
Fees [13]
Taxes [14]
Service Fees [15]
Water Fees [16]

Source URL: https://www.councilofnonprofits.org/trends-policy-issues/nonprofit-fees?page=1

Links
[1] http://www.delmarvanow.com/article/20140108/DCP01/301080036?nclick_check=1
[2] http://www.mainelegislature.org/legis/bills/display_ps.asp?ld=936&PID=1456&snum=126&sec3
[3] http://minnesotanonprofits.us2.list-manage.com/track/click?u=c7edeeaf000d49b689fe3b0f5&id=700a6a7694&e=ac3ede627f
[4] http://www.gazettechicago.com/index/2012/01/city%E2%80%99s-decides-to-charge-non-profits-for-water/
[5] http://www.donorsforum.org/s_donorsforum/bin.asp?CID=10844&DID=53108&DOC=FILE.PDF
[6] http://articles.chicagotribune.com/2013-05-01/news/ct-met-church-water-fees-20130501_1_water-fee-city-water-religious-leaders
[7] https://www.councilofnonprofits.org/thought-leadership/the-fault-line-nonprofit-property-tax-exemptions
[8] https://www.councilofnonprofits.org/sites/default/files/documents/IL%20Nonprofit%20Water%20Fees%20FAQ.pdf
[9] http://www.urban.org/publications/412640.html
[10] http://www.nytimes.com/2011/05/12/us/12nonprofits.html
[11] https://www.councilofnonprofits.org/sites/default/files/documents/Special-Report-State-Budget-Crises-Ripping-the-Safety-Net-Held-by-Nonprofits.pdf
[12] https://www.councilofnonprofits.org/trends-policy-issues-categories/state-local-policy-issues
[13] https://www.councilofnonprofits.org/trends-policy-issues-tags/fees
[14] https://www.councilofnonprofits.org/trends-policy-issues-tags/taxes
[15] https://www.councilofnonprofits.org/trends-policy-issues-tags/service-fees
[16] https://www.councilofnonprofits.org/trends-policy-issues-tags/water-fees