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Any plan to tax nonprofit agencies is an unsettling moveBy Joanne Stormer
we worship in nonprofit churches, synagogues and mosques and we rely on nonprofits when tragedy strikes our communities. The nonprofit sector is like air -- it is all around us but we hardly notice it. But if it went away -- what would we do? Gov. Jim Doyle's recently proposed 1 percent tax on gross revenues of hospitals could be interpreted as one more challenge to the tax exempt status of nonprofits. No one would argue with the goal of generating additional dollars for health care in Wisconsin. However, using taxes to achieve this -- particularly by taxing hospitals, many of which are nonprofit -- raises a potential concern. In the short term, this sounds like a win-win proposition. In the long run, which nonprofit charity will be the next to be taxed? A thriving nonprofit sector means a better quality of life in Wisconsin. According to a report released last year by the Wisconsin Nonprofits Association, (www.wisconsinnonprofits.org) the nonprofit sector in Wisconsin is large, diverse and growing in every county. In the "State of Nonprofit America," Lester M. Salamon wrote, "As the nonprofit sector has grown, it has invited more attention -- and challenge -- from hostile policymakers and others." In recent years nonprofits have come under more intense scrutiny for their tax exempt status. In general, a nonprofit organization receives tax exempt status in return for providing a public benefit. But, who defines what this public or community benefit is? I want to raise the flag of concern over the idea of taxing nonprofits to be a potentially unsettling move. Is this an attempt to apply a new twist to tax exemption statutes, so as to call into question the treatment of charitable nonprofits that have long enjoyed exemption from Wis-consin taxation? Wisconsin's nonprofits in-clude all kinds of organizations that provide public and community benefits. It is increasingly obvious that our state's nonprofits are not frills, but an integral part of a healthy, artistic, economically vital and productive state. As community needs outpace public funding, the competition among nonprofits for philanthropic funding intensifies. As a result, even nonprofit organizations that do not receive public dollars directly can find their revenue opportunities affected by state fiscal policy. Once our state embraces the position of taxing its nonprofits to leverage additional federal dollars, what's to stop us from taxing our nonprofits for other purposes? In this case, what happens once the matching federal dollars disappear? Who then pays -- the very people we thought we were serving in the first place? JoAnn Stormer is executive director of the Wisconsin Rural Leadership Program. madison.com ©2009 Capital Newspapers. All rights reserved. |
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