Tuesday, September 11, 2012

Virginia City Council Tackles Nonprofit Tax Exemption

Tax-exempt status was the topic of conversation during a meeting of the Richmond, Va., city council, as members tried to determine which organizations shouldn't have to pay property taxes after a ban on tax-exempt applications was lifted.

Nonprofits in Richmond had been unable to apply for tax-exemption for the past several years because of a moratorium on such applications. But after the historic Byrd Theater encountered economic difficulties, the ban was lifted, setting the stage for the Monday meeting.

According to a report on Richmond CBS affiliate WTVR, Councilman Marty Jewell said during session that he believed nonprofits in the city deserved a break because of the down economy. Councilman Bruce Tyler agreed, remarking that the city potentially footing the bill for some of these organizations is important because of the services they bring to the community.

Councilman Chris Hilbert argued that the moratorium on tax-exemption applications should be reinstated, remarking that the current review process makes it difficult for the city to determine which organizations truly need tax breaks. Hilbert plans to reintroduce the moratorium during an upcoming meeting, according to WTVR.

Tax-exempt organizations often have to pay fees to the government, making what are known as payments in lieu of taxes (PILOTs). The NonProfit Times reported in May that Brown University reached an agreement to double its current payments to the city of Providence, R.I. In addition, a survey from last year showed that 63 percent of nonprofits pay some form of fee to state and local governments.

Fewer than two dozen nonprofits had their tax-exemption applications approved by the end of the meeting, with the remaining groups combining to pay nearly $160,000 in annual property taxes to the city of Richmond.  You can read the full story on WTVR's website.

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