Property Tax Alert (Dec 07)

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Dear friends,

I have spent the past week hearing about the building-related woes of nonprofits. As if those weren’t tough enough already, along comes a Minnesota court decision that may make them considerably worse for one organization there, and possibly for you too. If the decision stands, it will set a terribly dangerous precedent in the matter of property tax exemptions for nonprofits in Minnesota and perhaps nationwide.

Under the Rainbow is a nonprofit day care center with a budget of around a half million dollars and a CEO who evidently makes somewhere in the neighborhood of $27,000 per year. The challenge to its property tax exemption is based on the fact that it charges market rate or close to it for its services. You can read more in the attached alert by Nonprofit Quarterly’s national correspondent Rick Cohen entitled “The Case of Under the Rainbow Child Care Center vs. Goodhue County”.

The decision will cost this small organization about $16,000 annually and if it were used as a precedent it would cost the sector untold millions.

We would love to hear from you on this decision. Sound off! What do you think?

Your friend,