As part of his proposal to overhaul the state’s tax system, Maine Governor Paul LePage has proposed rolling back the property tax exemption for nonprofit organizations.
The governor proposes to do this in conjunction with his budget plan, which includes eliminating revenue sharing grants to municipalities. To mitigate the financial impact of this revenue loss, the plan would allow municipalities to collect property taxes from nonprofit organizations (e.g., hospitals, museums, and private colleges and universities) with property valued at more than $500,000. These nonprofits would pay taxes on the portion of the property’s value above $500,000, at 50% of the host municipality’s mill rate.
As Bangor Daily News explained, the tax would be mandatory for all municipalities. However, municipalities could decide to appropriate the property tax revenue back to the nonprofit organizations.
