Nonprofit Taxes Proposed in Indy
The state of Indiana has joined Allegheny County, Pennsylvania, in considering legislation that would impose tax-like fees on nonprofits:
Nonprofit groups that want to avoid the “payment in lieu of tax,” or PILOT, would have to show the state they truly serve a charitable purpose, defined as providing “relief from human want.”
The new payment would be 1 percent of a property’s assessed value or $100, whichever is higher.
Churches and other religious groups would be exempt from the fee for their houses of worship, parsonages and land on which those buildings sit. But when churches get into ventures of a commercial nature — such as with church-run coffee shops, nursing homes or stores — they could be subject to the fee on those portions of their property.
The bill’s sponsors say they’re trying to protect senior citizens struggling to pay property taxes that end up subsidizing “nonprofit hospitals that generate millions in annual revenues, or organizations that essentially operate as social clubs, such as Elks clubs or college fraternities,” according to the Indianapolis Star. This noble-sounding goal is actually a prime example of political pandering. By that logic, seniors should also be exempt from paying taxes that fund lucrative sweetheart deals for Indiana corporations as well. And what about nondrivers whose taxes go toward highway repair?
It would seem that the legislators are targeting large hospitals, some of which, says the Star piece, “reap millions in annual revenue and occupy large swaths of land, where they have built facilities aimed at drawing well-to-do clients.” I’m more persuaded by St. Vincent Health spokesman Johnny Smith, who
said the idea ignores the $117 million in community benefits St. Vincent provides annually, including $25 million in charity care. It also doesn’t take into account research done at the hospital or the costs of caring for patients who wind up not paying or whose Medicaid insurance fails to cover their health costs.
“It definitely adversely affects our ability to serve our mission and our community,” Smith said. “We are definitely opposed to this bill.” | 501(c)
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