Nonprofit Fees

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