Nonprofits seek new legislation to clarify their status
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A recent ruling by the Minnesota Supreme Court has left a number of non-profit organizations wondering whether they might soon have to pay property taxes on the buildings that they own.
In light of that decision, the leaders of many such organizations met Friday in St. Paul to discuss legislation they 'd like passed to ensure they'll remain exempt.
Last month, the state Supreme Court ruled a day care center in Red Wing must pay taxes, because it does not meet one of the six long-used criteria for determining exemption.
Jon Pratt, Executive Director of the Minnesota Council of Nonprofits, said that puts unfair focus on the one criterion that some organizations might not meet.
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He'd like lawmakers to clarify just when groups have to pay, not just for the groups, but for donors, too.
Donors also deserve clarity, said Pratt. "Because people want to see all of their contributions go for the service and we'd like to resolve it, get greater clarity and predictability for those who volunteer and contribute to these organizations," he said.
Pratt noted that the ruling did not affect non-profit hospitals, schools or religious buildings. It only affects what are known as 'purely public charities,' which includes a wide range of organization.
Minnesota Public Radio is a non-profit in that category. It owns land throughout the state that is exempt from property taxes. The land is used for buildings, towers and other facilities for its 37-station network, including a five-story headquarters building in downtown St. Paul.
A company spokesperson said today that MPR is reviewing if and how it might be affected.
'If' was a key word for many organizations, because they simply did not know at this point if they should be worried.
David Alderson runs the West Bank School of Music in Minneapolis.
He said his school does a lot of charity work, such as exposing inner-city school children to music.
But they also offer music lessons for a fee, which might mean the school would have to pay taxes if it follows through on plans to buy the building where it's now located.
"I think it's a shame that I have to worry about that issue when we've already been granted charitable status by the federal government, and by the state government by the way for the purpose of paying sales tax because we don't pay sales tax right now," said Alderson.
The Council of Nonprofits is still drafting legislation it would like to see lawmakers pass.
Non-profit organizations make up an estimated 10 percent of the Minnesota economy.
