Nonprofit Tax Review Task Force Established
In my July 1st blog post, I described the “Economic Crisis Assessment” which would have applied to a broad swath of nonprofits and was designed to raise $100,000,000 per year for at least two years.
This harmful proposal did not make it into the budget, but it was instead turned into a study commission. The “Nonprofit Tax Review Task Force” is tasked with evaluating “…the feasibility and desirability of identifying parameters and a process for imposing a temporary assessment on certain nonprofit organizations that will generate approximately $100,000,000 in revenue annually.”
The 9 member Task Force will include a representative from MANP, one from the Maine Municipal Association, and 2 stakeholder seats, to be appointed by the Governor, in addition to the members from the legislature and the Department of Administrative and Financial Services.
We Need Your Help
In preparation for serving on this task force, we are collecting data from our members and friends. Here is how you can help:
1. Calculate the financial impact on your organization in each of the following scenarios. These two scenarios are by no means all that may be considered, but they are two approaches that were seriously considered this session.
- Scenario 1, based on the Republican Caucus’s Budget Proposal called the “Nonprofit Economic Crisis Assessment:”
The tax amount would be 2% of the amount entered on an organization’s form 990, line 10c from Part X, less $250,000 [(line 10c – $250,000) * 0.02]. Line 10 c is the value of land, buildings & equipment less depreciation.
- Scenario 2, based on LD 1496, “The Gang of 11” proposal:
The tax would be assessed on tax-exempt real estate only, worth over $250K, and it would be equal to the property valuation, less $250K, times the mill rate, times 0.25 [(just valuation – $250,000)*mill rate*0.25]
2. Send your calculations to me by email along with your thoughts on how this would impact your organization and those you serve, as well as any other thoughts around fairness, effectiveness, etc.
3. Invite your legislators to visit your facilities/property during the summer recess. This is the perfect time to share with them the important work you are doing in their communities for their constituents.
Watch this blog and our NonprofitMaine Weekly e-newsletter for updates on this important issue.