Tax Policy

Nonprofit Tax Review Task Force

A proposal designed to raise funds from nonprofits was rejected by the 126th Maine Legislature late in the first session, but was turned into the Nonprofit Tax Review Task Force. This Task Force “shall evaluate 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.”

We are participating in this Task Force and are happy to provide you with weekly updates and opportunities to weigh in. The most recent updates appear at the top.

Update #17 – February 4, 2014

The final report arrived in the mail today.  Concepts considered during the Task Force’s deliberations have emerged in LD 936, which was recently voted Ought Not To Pass (ONTP) on a 7-6 vote.  The bill has not been reported out and we will be following it as well as actions in the Appropriations Committee to insure service charges on nonprofit property owners are not included as a way to alleviate the pressure on municipal budgets because of cuts to Municipal Revenue Sharing.

Update #16 – January 9, 2014

A draft of the final report of the Task Force was distributed and presented to the Joint Standing Committee on Taxation yesterday.  This presentation was a courtesy as the Joint Standing Committee on Appropriations and Financial Affairs has jurisdiction.

Members of the Task Force have been invited to make comments on this draft report  by January 17th.  When the final version is available, we will post here.  The report in its current form is a good representation of the Task Force’s work, but there are additional points we will want reflected in the final document.

Because the Task Force unanimously agreed that raising $100 million annually for the State treasury through a tax on certain nonprofits was neither feasible nor desirable, and because the focus of the discussion shifted to municipal service charges, we will be watching the work of both the Taxation Committee and the Appropriations Committee for legislation in this direction.

Update #15 – December 12, 2013

Preliminary Report

The task force met five times and today, this preliminary report was presented to the Appropriations Committee by Senator Flood and Representative Carey.  A final report is in the works and will be posted here.

  • The first statement was accepted by all present task force members. Rep. L. Gary Knight was not present.
  • The second statement was accepted by five task force members: Senators Flood & Millett, Rep. Carey, Joe Grube, and Commissioner Millett.  Three members voted in opposition: Art Blank, Jim Libby & Brenda Peluso

Update #14 – December 6, 2013

We have received the materials for the last meeting of the Task Force.

The final meeting will be held on Monday, 12/9 at 1 pm in the Taxation Committee Hearing Room (127).  During this last meeting, the Task Force should be positioned to write the report which will be presented to the Appropriations Committee potentially as soon as their mid-December meeting.

Update #13 – December 3, 2013

Last Monday, November 25th, the Task Force met to discuss the draft proposal put together by Senator Flood & Representative Carey.   The discussion was difficult and the members were not able to find consensus on any items.  The proposal is similar in nature to many bills in the past that have sought to repeal or limit nonprofit property tax-exemptions.

Jeff Austin of the Maine Hospital Association, sitting in for Task Force member, Arthur Blank, and Brenda Peluso of MANP both pointed out the difficulty in commenting on the specifics of the proposal given their inability to support anything in this vein.  They however did point out issues with several aspects of the proposal including the $250,000 annual revenue threshold, and the 2% cap.

Senator Millett noted that if she were to support anything of this nature, she would need to see data.  What would the impact be to the nonprofit sector and what benefits would municipalities receive?  Geoff Herman of the Maine Municipal Association agreed to work with a few municipalities to collect some data should a proposal similar to the one linked above be implemented.  At its final meeting, Monday, December 9th, the Task Force will review any data and make recommendations.  It is highly unlikely that the Task Force will be able to make a unanimous recommendation.

Full meeting notes will be available before the 12/9 meeting and will be posted here.

Update #12 – November 22, 2013

We received the meeting notes from the November 20th meeting, but no formal agenda yet for the next meeting.  The Plan is to discuss the proposal to be put forth by Senator Flood and Representative Carey which is currently being drafted.  Tune into the next meeting on Monday, November 25th at 1:00 pm Room 126 (The Transportation Committee Room) of the State House to hear the debate.

A fifth meeting has been scheduled for December 9th at 1:00 pm.

Update #11 – November 21, 2013

Yesterday’s meeting resulted in some members of the task force agreeing to create a proposal to which we can react at the next meeting.  This proposal will be based on a bill carried over from the last session, LD 936, which would expand current the current service charge bill to allow municipalities, by a vote of their governing body, to assess service charges on most nonprofit organizations including charitable & benevolent, literary & scientific, fraternal organizations, and more.   Senator Flood and Representative Carey will be the main architects of the proposal.

Tune into the next meeting on Monday, November 25th at 1:00 pm Room 126 (The Transportation Committee Room) of the State House to hear the debate.  As soon as the November 20th meeting notes and the November 25th agenda are available, we will post them here.

Update #10 – November 19, 2013

We received the meeting materials for the November 20 meeting which included the notes and some materials from the November 15th meeting:

Update #9 – November 14, 2013

Note:  The November 15th meeting will be held in Room 228 of the State House.  You can listen online via the Appropriations Committee hearing room’s audio feed.

Update #8 – November 8, 2013

We received the meeting materials for the 11/15 meeting of the Task Force today.  They are as follows:

If you would like to be added to our “interested parties” e-mail list, please contact Brenda Peluso by e-mail.

Update #7 – November 4, 2013

The next three meetings of the Task Force will be held in Room 127 of the State House from 1 – 4 pm on the following days:

  • Friday, November 15
  • Wednesday, November 20
  • Monday, November 25

These meetings are open to the public and can be listened to online.

Update #6 – October 30, 2013

The first meeting of the Task Force was today at 1:00 pm in room 127 of the State House, the Taxation Committee room.  Two members of the Task Force, Senator Millett and Arthur Blank, were unable to attend.  After a brief review of the Task Force legislation, the agenda included presentations from:

  • Brenda Peluso, our director of public policy, whose presentation included information about the size and scope of Maine’s nonprofit sector as well as the rationale for tax exemption and a brief state of the sector.
  • Dennis Doiron, Director, Maine Revenue Services Income Tax Division, who provided a brief review of IRS 990 tax form and noted that only when a nonprofit pays Unrelated Business Income do they also then file a corporate return with the State.
  • David Ledew, Director, MRS Property Tax Division, who shared information about nonprofit property tax exemption and service charge laws, the annual Municipal Valuation Return Statistical Summary, and the final report from the 2008 Service Charges Task Force.
  • John Sagaser, MRS Legislative and Policy Counsel, who shared information about nonprofit sales and use tax exemptions.
  • Geoff Herman, Maine Municipal Association, who presented results from their research on the ways in which other cities and states approach nonprofit tax exemption.

Members of the committee asked questions about the various tax treatments of nonprofits, but no clear direction is yet emerging.  The task force hopes to meet three more times before Thanksgiving.  We will post those dates as soon as they are determined.  These meetings are open to the public and can be listened to online.

Update #5 – October 24, 2013

Membership on the Task Force has been posted, but no meetings have been scheduled.  We have a seat at the table and will be advocating in the best interest of Maine’s nonprofits and the communities we serve.

Update #4 – September 12, 2013

The State has created the website for this task force. There is very little detail at this time, but this is where the member list, meeting schedule and agenda, and materials will be posted throughout the fall.

We will continue to use our website to augment the State’s postings and alert our readers to new content.

Update #3 – August 29, 2013

The Appropriations Committee and the Taxation Committee appoint the following members to serve on the task force:

  • Representative Michael Carey (D) Lewiston, Appropriations
  • Representative L. Gary Knight (R) Livermore Falls, Taxation
  • Senator Patrick Flood (R) Kennebec, Appropriations
  • Senator Rebecca Millett (D) Cumberland, Taxation
  • Commissioner Sawin Millett of the Maine Department Administrative and Financial Services has designated Dr. Michael Allen to chair the task force.

The 4 remaining members of the task force will represent “interested parties, including a representative of the Maine Association of Nonprofits, a representative of the Maine Municipal Association and 2 representatives of other interested parties…” Several groups nominated thoughtful individuals to fill these 4 slots and the Speaker of the House and the President of the Senate have submitted names to the Governor’s Office for final selection.

Update #2 – August 12, 2013

Maine Public Radio’s Maine Things Considered airs a report by Mal Leary on the formation of the task force.  Listen online.

Update #1 – June 26, 2013

The 126th Maine Legislature overrode the Governor’s Veto of LD 1509: “An Act Making Unified Appropriations and Allocations for the Expenditures of State Government, General Fund and Other Funds and Changing Certain Provisions of the Law Necessary to the Proper Operations of State Government for the Fiscal Years Ending June 30, 2014 and June 30, 2015.” This 2014-2015 biennial budget bill includes the creation of the Nonprofit Tax Review Task Force as well as several other study commissions. This webpage is dedicated to following the Nonprofit Tax Review Task Force. Subscribe to NonprofitMaine Weekly for information on the work of other study commissions.