Exemptions for Charities Face new Challenges

Property Tax Exemptions Challenged

Authorities and the federal government are increasingly challenging the tax-exempt statuses of non-profit intuitions ranging from small homes to universities. Smaller organizations that provide services like day care or drug treatment are being challenged, too. Under Court Law, they cannot charge for services but must give it away in order to qualify. Court decisions also concluded that in order for an organization or institution to have their property tax exempt, they must offer a service that the government does not offer, and that the entity does not have restrictions based on race, gender, religion, ethnicity or any other form of discrimination. Property tax exemptions are regulated at the State level and the income exemption are regulated at the federal level. However, with the latest Supreme Court ruling, states must reexamine properties that have received tax exemption. Those most effected would be nursery schools, medical care assistance facilities, non-profit businesses and universities. The cost of tax-exempt charities across the nation to local governments range from $8 to $13 billion annually. These new measures from the federal government hope that some of those funds are returned to local government.