Friday, July 3, 2009
Another example of the push by local governments to "tax" tax-exempt nonprofits comes from Rhode Island. The Providence Journal reports that the city council of Providence agreed Thursday to establish a commission to study the potential for getting revenue from local tax-exempt entities. Apparently, the Rhode Island state legislature is considering measures to give cities the ability to tax nonprofit hospitals and colleges that currently are tax-exempt.
A proposal to assess a “student impact fee” on private colleges and universities is currently before the full state House of Representatives, and another proposal is pending before a House committee. Another bill would authorize municipalities to collect a fee in lieu of taxes from nonprofit entities that own properties assessed at $20 million or more. That proposed fee has not yet been voted on by the House Finance Committee.
One wonders whether, particularly in cities on the east coast (Boston is another leader in this area), we are reaching some sort of "tipping point" where nonprofits will no longer be exempt, or perhaps only partially exempt, from local property taxes.