Question

1. What should nonprofit organizations be exempt from payment of local property taxes? Don’t they benefit from local services just as much as proprietary businesses? For instance, why should a nonprofit hospital be exempt from the local property tax, while a similar proprietary hospital is taxed? Is the argument for exemption different for a state university compared with a similar private university?

Answer 1

Non profit organisations works for the welfare of the society in large and not to earn profits. It is regarded as that if NPOs are burdened with taxes on their income and other indirect taxes like property taxes, they may deviate from their goals and start to charge higher prices in order to compensate thus defeating the goal of government to encourage such organisations which eases the burden of government for the conduct of welfare activities.

No, in my opinion argument for a state university compared with a similar private university and a hospital is on same grounds as private hospitals and universities charge very high prices for their services in comparison to public ones and it makes sense to tax them for their higher income extraction from the common public.

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