SB181, as engrossed by the Senate, proposes the following:
Requires certain institutions seeking property tax exemption to file information return that states basis for exemption claim in terms derived from Oregon case law. Requires information return to be accompanied by institution's most recently required and timely filed Form 990 or Form CT-12[, as applicable, filed for current tax year]. Requires institution that files Form 990-N to file information return [postcard instead of information return] containing information on institution's most recently required and timely filed Form 990-N. Denies exemption for noncompliance.
Basically, SB181 will create a new, annual reporting requirement that will leave the rules unclear, but individual county tax assessors will be able to interpret the current laws using their own ideas of eligibility for exemption at a time when they are under political pressure from politicians to bring in more revenue.
NAO and dozens of nonprofits across Oregon provided testimony opposed to SB181 when the House Committee on Revenue held its only hearing on the bill on May 9, 2017.
NAO and nonprofits across Oregon agree that it is NOT in the best interest of the government or the people of Oregon to ask nonprofits to provide annual reporting that will determine property tax exemption status. This extra layer of bureaucracy is unnecessary and burdensome to charitable nonprofits and is designed to trip up unsuspecting nonprofits with the very real result of unfair levies of property taxes that are undeserved and poorly defined in statute.
Legislators themselves know that the property tax laws in Oregon are broken and have several times talked about the necessary fixes. Proponents for this bill admitted in testimony on May 9 that one of their agendas for this bill is to disqualify certain nonprofit organizations that they personally do not believe should meet charitable exemption status. Nonprofits as diverse as large hospital systems and feral cat organizations were named as the targets of their aggression!
NAO believes it is extremely dangerous to use this kind of bill as a means to attack the great work of charitable nonprofits and the amazing work we do across Oregon. In this year of budget cuts and budget shortfalls, nonprofits have become an easy target to pull revenue into county and state coffers. Our legislators are misunderstanding the importance of nonprofits, especially now, and the vital work that the community does through nonprofits. In fact, a study conducted just last year by Independent Sector clearly showed that taxpayers would rather give $1,000 to charity than to the government in taxes!
We believe the result of passage of SB181 will create a huge potential for a large number of nonprofits to lose their tax exempt status based on interpretations that may not be fair, valid or are inconsistent. We have particular concerns for smaller rural, culturally-specific and all volunteer nonprofits who may not realize they have been burdened by a new hoop to jump through courtesy of their legislators.
Action is needed NOW!
NAO asks that nonprofits contact your Oregon representative and Governor Brown and take the following steps:
- Remind Legislators and the Governor of the importance of your nonprofit's work in your community and that property tax exemption for nonprofits is not given at the deficit of government, but at the productive use of community!
- Demand that House legislators vote against SB181 on the floor of the House when it comes to a vote. You will need to send this directly to your House Representatives. A vote on this bill could take place as earlier as tomorrow! (link to House of Representatives' contacts and link to the Governor's office)
- Express your strong opposition to SB181 now or get ready to lose your nonprofit property tax exemption based on arbitrary criteria and personal agendas of your County Tax Assessors!
Please let NAO know of your action by either sending an update or copying us at email@example.com on your letters to your representatives.