Weekly Round-Up: Proposed Property Tax on Nonprofits Sparks National Debate

As municipalities continue to face budgetary shortfalls, Gov. Paul LaPage's (Me-R) proposal to permit communities to tax nonprofit organizations has sparked a nationwide debate, Bloomberg BNA State Tax Law Editor Radha Mohan writes in this week’s issue of the Weekly State Tax Report

Regardless of whether the proposal is enacted, the governor's tax plan has forced lawmakers and taxpayers around the country to reassess the long-standing notion that nonprofit entities should be exempt from paying property taxes, Mohan writes.

If adopted, the LaPage plan would make Maine the first state to formally levy property taxes on nonprofits.

But, many recession-racked cities in California, Massachusetts, New York and Pennsylvania have contemplated the pros and cons of taxing nonprofits in recent years through Payment in Lieu of Tax (PILOT) programs, Mohan says. These programs are one alternative to the formal property tax currently being discussed in Maine.

Mohan’s in-depth look at this hot topic can be read by signing up for a free trial of the Weekly State Tax Report here.

Some notable developments from the State Tax Developments Tracker – Bloomberg BNA’s new tool for monitoring important developments in all the states:

Washington Department of Revenue Publishes Overview Regarding Tax Incentives

Maine Revenue Services Publishes Maine Tax Alert for January 2015

California Franchise Tax Board Publishes February 2015 Tax News

For more information about this and other state tax issues, sign up for a free trial of the Bloomberg BNA Premier State Tax Library

In other developments… 

New York – NOL deduction does not decrease entire net income in year liability measured on alternative base, by PwC

Pass-through Businesses can Face Marginal Tax Rates of Over 50 percent in Some States, by the Tax Foundation

Legal Alert: New York Governor’s Budget Proposes Radical Tax Changes, by Sutherland

Compiled by Priya D. Nair