Question

The continued constriction of local government budgets has prompted a number of cities around the country to look at their tax expenditures—the exemptions or other tax relief measures provided to businesses, individuals, and nonprofits. What is the justification for exempting nonprofits from paying local property taxes? From paying state and local sales taxes? What are the long-term effects to the property tax base of exempting nonprofits from the property tax? Several local governments have begun demanding payments in lieu of taxes (PILOTs) from large private universities and hospitals. Should all nonprofits be required to pay PILOTs? Why or why not?

Answer 1

Non profits serve as non commercial business setups for societal welfare and serve society needs at large. Hence these setups are tax exempted to push tgeir growth for employment which is unaccounted in employment numbers.

However large non profit hospitals who have shown revenues growth and high level of Customer growth need to pay taxes to prevent injustice. If large nonprofits have sizeable market share, revenue and customer market share there must be PILOt taxes to avoid tax outgo loopholes for government.