Another Pennsylvania Nonprofit Denied Property Tax Exemption

 

April 1, 2014; Erie Times-News

Yet another Pennsylvania nonprofit has been handed a decision by a local tax board denying its property tax exemption, according to a report in the Erie Times-News. It is a story repeated in municipalities in much of the eastern United States.

The Jefferson Educational Society, a think tank based in the storied northwestern Pennsylvania city of some 100,000, lost its request for an exemption on its real estate taxes, but is trying to work out a deal on payments with the county. The Erie County Board of Tax Assessment Appeals unanimously denied the Society’s exemption in a ruling made final last week.

Offsetting the sting of that decision, the board also reduced the assessed value of the society’s property, cutting its annual real estate tax bill in half. The Society has the right to appeal the board’s decision to Erie County Court, or it could work out a deal to make payments in lieu of taxes (PILOTS).

While the Society’s property would remain taxable under a PILOT deal—similar to the 20 to 25 agreements other local nonprofits have with Erie County—the County would recognize that it “engages in some charitable activities by not pursuing a full tax bill,” according to the paper’s website article.

 

 

Talks about such an agreement have already started with the Erie School District, which was the most vocal opponent of the Society’s exemption request. The district’s superintendent has pushed to reduce tax exemptions in the city, where about one-third of all properties are exempt. It is a situation common in many municipalities across the U.S., particularly those with large educational and healthcare nonprofits.

The Jefferson Educational Society, founded in 2008, offers lectures and other educational activities, some of which are free. The society applied for an exemption on property it bought in last year, which had been exempt when a Jewish synagogue owned it, but that was revoked when it changed hands.

According to the Times-News, the Society said its programs helped it meet all court-established criteria for tax-exempt organizations in Pennsylvania, but the Assessment Board questioned whether it meets two criteria: that it relieves the government of some of its burden and benefits a substantial and indefinite class of people who are legitimate subjects of charity.—Larry Kaplan