While I've been covering a few attempts by cities and states to use nonprofits as a source for offsetting their many economic challenges, Penelope Lemov of Governing Magazine has painted a particularly good portrait of what's going on around the country and more importantly, where cities may find "legitimate taxing opportunities" (although that is not always a criteria for public officials).
I thought Ms. Lemov particularly helpful in highlighting the distinctions between types of nonprofits, making certain types more practical tax targets than others. Specifically, Ms. Lemov suggests that targeting religious groups raises constitutional issues; going after social services is first mostly about getting back the money government doles out (as these are really contractors and extensions of government and government then is just adding another administrative layer) as well as potentially large political consequences; but healthcare and universities are more consumers of government services and so they are the better targets. I don't know what happened to museums but maybe that's ok for the moment.
Ms. Lemov's last point -- PILOT (payment in lieu of taxes) deals may be more effective in generating revenue than actually taxing these institutions for a number of reasons. And, of course, let's not forget the taxes on revenue-generating activities (unrelated business income -- UBIT). I know one municipality that has calculated the amount of space being used for "non-charitable" activities and sent property tax bills. Right or wrong and for-sure a hassle to the nonprofits, I've gotta give credit to the municipality for making the attempt.
Caveat nonprofits!