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My Turn: Taxing nonprofits is a lose-lose situation

Last modified: 2/5/2015 12:40:02 AM
On Friday, House Bill 569 will be heard before the House Ways and Means Committee and, if passed, will result in a loss in revenue for the state, a loss in revenue for charitable organizations, and, most importantly, a loss for people and communities.

Sponsored by Rep. David Hess of Hooksett, HB 569 calls for mandating that nonprofit charitable organizations with revenue exceeding $10 million be taxed under the Business Enterprise Tax.

If enacted, the network of community health centers, mental health centers, disability services programs, nonprofit nursing homes, affordable housing groups and more would take a deep hit to their revenue, such a hit that services would be impacted.

This bill puts in motion an illogical sequence of events that leads to one question: Why do this?

If enacted, nonprofits such as Easter Seals, Goodwill, Gateways Community Services, Nashua’s Harbor Homes and others who serve our most vulnerable families will need to come up with revenue to pay this hefty tax. They will need to either curb services or raise more money each year to pay this tax.

None of these organizations are going to be open to curbing services because they are looking at an ever-increasing client list of families living in poverty or challenged by illness, many of whom are working but unable to make ends meet.

It’s unrealistic to imagine that these tax-exempt organizations will be successful by seeking out donations from local donors, private foundations, the United Way or a local business partner in order to pay the Business Enterprise Tax.

Quite simply, this bill refuses to acknowledge that the state of New Hampshire has ethically and economically seen the wisdom in honoring the tax exemption for charitable nonprofits for good reasons.

The only way nonprofits are able to conduct their work in highly economical ways is because they operate on business models that leverage volunteers, donations and private grants and because they pour all profit back into mission, not shareholders pockets.

It’s true that we as a sector must do a better job at connecting the dots. We need to explain how services for veterans through Easter Seals reduces the state’s cost when a veteran needs care and how the programs at the Manchester YMCA helps keep police costs down because high-risk youth are involved in activities and not roaming the streets. We need to do a better job at explaining that, if Goodwill has stores that attract all buyers, it can engage more unemployed parents in job training in those stores.

That said – we oppose this bill for many logical and vital reasons.

Why pass a bill that will impose a new tax on a number of charitable organizations when the end result is a loss all around?

(Mary Ellen Jackson is president and CEO of the New Hampshire Center for Nonprofits.)


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