Maine’s Governor Proposes Budget That Would Include Property Tax for Large Nonprofits

Maine’s legislature is in the process of considering the governor’s biennial budget proposal. In relevant part, the budget includes a tax on “large” nonprofit organizations operating within the state. The provision would require municipalities to tax nonprofit organizations at 50% of assessed property value over $500,000 as well give municipalities the authority to impose other fees. This has prompted many to say that the budget, if adopted as is by the legislature, would ultimately be an overhaul of the state’s tax code.

Rhetoric about taxing nonprofits and exempt organizations is nothing new. However, the notion is gaining traction in many states, particularly in the northeast. And while some states have attempted to impose similar taxes, this is the first time such a proposal has been made part of a governor’s budget proposal. Proponents of the measure claim that the tax would help broaden the base and allow the state to cut taxes for citizens in need of tax relief. Read more here.

If adopted by the legislature, how might this affect the nonprofit sector nationally? Are other states likely to follow suit? 

DAB