From PANO: On December 7, 2009, PA Senator Wayne Fontana (D-Allegheny) and PA Representative Tim Solobay (D- Washington) plan to introduce legislation in both the State Senate and State House to impose partial property taxes on Pennsylvania's charities.

This new bill would amend the State's Purely Public Charities Act (Act 55 of 1997) to allow municipalities the option of imposing "Essential Services Fees" on real estate owned by charities. The tax would be based on the square footage of the property (most likely a fee of up to $100 per 1,000 square feet of tax exempt property, with the first 5,000 square feet exempt.) Municipalities that choose NOT to exercise their "local option" may still impose "voluntary" agreements on charities for payments in-lieu of taxes.  Voluntary agreements are currently permissible under Act 55. *This bill is based on a 2007 bill (SB1328) that died in committee.

This bill poses a major problem for thousands of 501(c)(3) nonprofit organizations in Pennsylvania that own property or will acquire property to further their charitable mission. The reality is that many nonprofits are already contributing to their local municipalities through "voluntary" payments-in-lieu of taxes or fair share agreements. A 2009 State Legislative Budget and Finance Committee (LB&FC) study found that nonprofit hospitals and public and private universities are already substantially contributing to their local municipalities. The same study found that the vast majority of tax-exempt property in Pennsylvania is actually held by government and religious organizations.

Taxing charities is just wrong-headed. It diverts precious charitable resources at a time when the need is greatest. It also fails to consider the value of nonprofit services to the communities they serve. 

The Pennsylvania Association of Nonprofit Organizations (PANO) encourages you to contact your State Representative and State Senator.  Urge them to NOT CO-SPONSOR the Fontana/Solobay bill to tax charities. Follow this link: http://capwiz.com/pano/issues/alert/?alertid=14390276.