Think your organization has it rough? According to a recent report in The New York Times, a number of California nonprofits are being denied property tax exemptions because the state's chief tax collector says they aren't doing enough to help the state's residents specifically/directly. It's not known how many nonprofits are being affected or why this is now an issue, though the report cites California's budget crisis as a possible reason.
Nonprofits clashing with government on tax exemptions is hardly breaking news. The Times article brings up the case of Hawaii attempting to impose a 1 percent tax on nonprofit groups, or when Boston asked nonprofits to pay what amounted to a property tax. There was also a report on our website about how most nonprofits paid some form of tax.
It is worth noting that the process to apply for tax-exemption in California is much different than other states. The Times piece describes it as a "two-tiered system." Applicants first have to apply to the Board of Equalization, which collects state-mandated fees and certifies whether you are eligible for an exemption. The final decision, however, rests in the hands of assessors in the state's 58 counties. They make their decision by determining whether the property in question will have a "primary benefit" to the state. If that sounds vague, there is a reason for that. The article quotes Anita Gore, spokesman for the Board of Equalization, as saying that some things nonprofits do can't be "quantified in that sort of easy way."
If you are interested in reading the full story, head on over to The New York Times.
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