State and city officials consider eliminating charity tax exemptions
March 02, 2010
As the national economy slowly improves, an increasing number of state and city officials are considering revoking tax exemptions for nonprofits as a way to boost tax revenue, reports the New York Times. This may be bad news for charities as these same tax exemptions often save organizations significant cash, accounting for nonprofit
program and promotional funds.
Organization leaders believe such tax measures are shortsighted as they will inhibit nonprofits' ability to provide services that most state and local governments depend on. Nonetheless, legislators think they have no choice.
"We're having to look at the public services nonprofits use and how we can adequately cover those costs," Matt Greller, executive director of the Indiana Association of Cities and Towns, told the source. "We can't give them away for free any longer."
Churches would likely continue to be exempt from taxes, but other organizations - including schools - would be affected.
The New York Times reports that the government has experimented with similar limits on nonprofit tax exemptions in the past, but with mixed results.
Organization leaders might consider the threat of losing tax exemption as a motivation to boost nonprofit fundraising efforts in 2010. Without tax credits from the government, charities may need to more heavily rely on the generosity of donors to maintain services.