April 2, 2011; Source: The Times-Picayune | Tax season may soon be an even more dreaded time for some New Orleans nonprofits. The Times-Picayune reports that last Friday, the city’s mayoral-appointed Tax Fairness Commission recommended changes to the state’s constitution that would allow cities statewide to collect taxes from nonprofits as part of a larger effort to bring in more revenue from untaxed property.
The commission made three recommendations to change the tax treatment of nonprofits. If adopted by lawmakers and voters statewide, the most sweeping of those changes according to The Times-Picayune, “would allow local governments to collect taxes on as much as half the assessed value of properties that long have paid nothing because their educational, religious, cultural, fraternal or other missions qualify them for exemptions.”
As the Newswire reported in a related story last month, the commission’s work follows a report from the Bureau of Government Research that found that “43 percent of the total assessed value of property in Orleans Parish is exempt from taxation, with nearly one-quarter escaping taxes because it is owned by nonprofit groups.”
Bob Farnsworth, a senior vice president at the National World War II Museum, voiced his concern that changes to his group’s tax-exempt status would have a negative effect on the museum’s ability to draw 400,000 visitors annually to the city.
“If we were at some point encumbered by a significant property tax that’s added to the challenge that we have to expand and build a museum . . . then I think the city could possibly be a net loser” he said.
In its recommendations, the commission did not specify if there would be different exemptions for different types of nonprofits, leaving those decisions up the the Legislature, according to The Times-Picayune.—Anne Eigeman
