Proposed Bill to Require Property Tax Payments from Nonprofits in Massachusetts

A bill under consideration in Massachusetts aims to address property tax exemptions for nonprofit organizations. While these tax-exempt institutions are encouraged to make voluntary payments through the Payment in Lieu of Tax (PILOT) Program, the amounts contributed vary greatly. The proposed bill would empower municipalities to mandate payments from larger nonprofits, equivalent to 25% of the property tax they would have paid if not exempt. Under the proposed bill, tax-exempt institutions, including hospitals, colleges, and museums with properties valued at or above $15 million, would be required to make payments equivalent to 25% of the property tax they would owe if not exempt.

State Representative Erika Uyterhoeven is confident in the bill’s potential for success as it has generated considerable interest compared to other revenue proposals. Opponents of the bill state that the tax-exempt nature of nonprofits allows these organizations to dedicate all their funds to their missions, and this would set precedent to allow all types of taxation on nonprofits. The bill is currently awaiting further review and discussion in the Legislature’s Joint Committee on Revenue. As this bill progresses through the legislative process, Ryan will closely monitor any developments and help where needed.