According to a Philadelphia Inquirer columnist, the mayors of Pittsburgh, PA and Providence, RI are considering applying a tax to college tuitions. In Pittsburgh, "the mayor has proposed a 1 percent tax on tuitions paid by the 100,000 students at Pittsburgh's five universities. The estimated $16.2 million in revenue is already being built into his 2010 municipal budget."
Now, at some level, I actually think that taxing college tuitions is a pretty smart idea. For the most part it does not directly affect locals, it gets some more support from colleges (where payments in lieu of taxes don't usually come anywhere near what colleges get from towns), and offsets what is truly becoming a problem for cities: not enough taxes.
BUT, on the other hand, isn't this dangerously near threatening the tax exempt status of nonprofits? Instead of directly taxing the nonprofit, why not tax their customers? What will happen next: put a tax on those who go for counseling at a family service agency, community health care users or perhaps even a city per person charge on the homeless or soup kitchen customer.
So, taxing college student tuitions just could become a really bad precedent for the whole nonprofit community.