The Tricky Business of "Taxing" Non-Profits

Payments in lieu of taxes (PILOTs) are a popular new way for cash-strapped cities to add to their revenue by swapping voluntary payments from nonprofits for property taxes. The Lincoln Institute of Land Policy evaluates this novel practice.

1 minute read

March 31, 2011, 11:00 AM PDT

By Tim Halbur

Daphne A. Kenyon and Adam H. Langley, authors of the study, say that at least 117 municipalities have tried out a PILOT program since 2000.

Do PILOTs work? Kenyon and Langley conclude that yes, but it depends:

PILOTs "...have the potential to provide crucial revenue for municipalities that have a significant share of total property value owned by tax-exempt nonprofits, both as a stop-gap in the current municipal fiscal crisis and in the future. However, PILOTs rarely account for more than 1 or 2 percent of municipal revenues, so expecting these payments to eliminate local government deficits is unrealistic."

FULL STORY: The Municipal Fiscal Crisis and Payments in Lieu of Taxes by Nonprofits

Thursday, March 31, 2011 in Land Lines

Community / Economic Development United States property taxes PILOTs

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