I've covered the subject of nonprofits being taxed over many years. When cities face financially difficult times, the subject re-enters the sphere even more so as the scramble to generate more town funds is thought to be necessary by tax collectors and their bosses. There are of course activities and spaces where nonprofits must pay taxes. UBIT (unrelated Business Income Taxes is a favorite federal tax (when a business a nonprofit is operating is non-mission specific or at least can't be proven to be mission related). State sales tax is generally applied to goods and services purchased by individuals no matter the mission. And then there is property tax - a more sticky issue. Parking lots for instance or spaces in a building that generate non-mission specific income. And of course, as hospitals and universities know, there are workarounds often that look like something called a PILOT - payments in lieu of taxes - a negotiated price instead of what otherwise might be a really big tax bill all based on the idea that the non-cash benefits to a town are greater than the value of collecting taxes at full value.
All this to say that if the towns are hungry for income, nonprofits appear as appealing prospective sources. This to raise the flag to boards: caveat emptor. Make sure you are aware of what is being discussed and be sure to be ready with a platform that emphasizes mission. Taxation is a board matter!
Just to reinforce my point: check-out this Herald-Tribune commentary.
Harry T. Barnes, Englewood
Why is Selby target of tax appraiser?
I understand the importance of a solid tax base to keep up city services, but let's not give a body blow to our cultural institutions!
Why on earth would our tax appraiser, Bill Furst, go after institutions such as Selby Gardens? Many have gift shops, cafes and events that diversify their revenue stream to support the mission of bringing arts and culture to our community through research, science and education.
Tell Furst that Selby Gardens is recognized as an affiliate of the Smithsonian Institute, a powerful testimonial to its work as a cultural institution.
Selby proposed a resolution using calculations similar to what the property appraiser used at Mote Marine, but Furst wants to treat Selby differently. Why?
What is Furst's real mission in treating Selby differently than other nonprofit organizations?
Will he tax Ringling Museum, Van Wezel and places of worship at 100%, since they have events and dinners at their facilities?
Do not allow this body blow to the many cultural institutions struggling to make it financially in the face of the pandemic. Tell Furst to follow the state rule for taxing nonprofits.
Arts and culture are essential to the continuing development of a vibrant, creative community.