State and Local Governments Seek Fees from Nonprofits

NPR reports on the trend where cash strapped state and local governments are looking to tax-exempt groups for funds. "Government officials are proposing new fees on nonprofits to help pay for services. They're also challenging the exemptions these groups get from sales and property taxes."

In Concord, Mass., for example, the Board of Selectmen sent a letter to the town's nonprofits earlier this year. It said that local property taxes were so high they were driving residents away. The board asked the town's private schools, hospitals, charities and churches if they could start paying their fair share.

This development has been occurring more often across the country during the economic downturn. However, such costs will in the end negatively affect those who rely on the services many nonprofits provide, such as food pantries. While donations are down significantly, the demand for charitable services is increasing.

The article notes that the city of Boston wants its nonprofits to pay 25 percent of what they would owe if they were not tax-exempt. In addition, Minneapolis has put in place a "streetlight fee" on nonprofits to help pay for electricity and bulbs.

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