Cash-starved government moving to tax non-profits

Much has been written in this blog about non-profits. For instance, how some of them are legitimate serving a cause; how others are fronts for very highly paid “Executive Directors” and that is about all; how others serve primarily as political platforms for wanna-be politicians. Also, how many of them seem to be dependent upon government contracts and funds for their very existence.

Well, now some governments are looking at non profits, generally tax exempt from income taxes and property taxes, as not paying their fair share for government support such as police, fire, street lighting and public education and moving to begin taxing them.

The New York Times reports that across the country an increasing number of states and local governments are considering the elimination of non-profit tax exemptions. A bill pending in Hawaii would require non-profits to pay a 1 percent tax. Kansas may make non-profits subject to sales tax. Some counties are considering revoking the exemption of non-profits from property tax in Kansas and Pennsylvania. Minneapolis recently made non-profits subject to fees charged for street lighting.

Large amounts of land and buildings, some extravagant and worth a lot of money and tax free, are owned by non-profits in California. Hundreds of millions of dollars are earned tax free every year by non-profits. Non-profits compete against for profit companies in bidding for government contracts, and of course their tax exempt basis gives them an advantage in any such competition.

Perhaps it is time to level the playing field and tax non-profits just like the rest of us.


About Over But Not Out

A retired Orange County employee, and moderate Republican. The editor seriously does not know OBNO's identity as did not the former editor, but his point of view is obviously interesting and valued.