One of the virtues of being a nonprofit is a tax-free status, however that freedom comes at the hands of a lot of paperwork. If certain forms don’t get appropriately filed, non-profits can be on the hook to pay certain taxes. When it comes to property taxes, some nonprofits are at risk of losing their property. Four bills (Int. 245-2018, Int. 1784-2019, Int. 1799-2019, and Int. 1776-2019) that will offer more tax-exempt protections for non-profits were reviewed by the NYC Council.
An example of the nightmare that can happen without these added protections was evidenced last year with the Devoe Street Baptist Church, an 115-year-old religious institution in the community. They discovered that a $200,000+ tax lien on the church was sold through the tax lien sale process and $35,000 in additional real estate taxes were stated due by the church.
Frank Lang, Dir. of Housing for St. Nicks Alliance testified before the council on this matter, “St. Nicks Alliance worked with Take Root Justice to assess the situation and contact the appropriate office at the Department of Finance to review the matter. The church put off the collection agencies which purchased the tax lien. Fortunately, the situation was corrected and the church’s exemption was restored. However, without the timely alertness by Take Root Justice and the efforts of St. Nicks Alliance staff members the church would likely been taken into foreclosure. A costly legal proceeding would have commenced and even if successful would have severely impacted the financial stability of the institution. I implore the NY Council to pass legislation which can properly safe guard these errors from occurring and insure that legitimate tax exempt institutions are not erroneously lost through foreclosure.”
Sponsor of Int. 245-2018, Council Member Antonio Reynoso said, “Nonprofit organizations are invaluable assets to our communities — they help to provide social services, build affordable housing and offer religious sanctuary to residents. Yet often times, they are inhibited or shut down because of our arcane tax laws and debt they should have never been charged. I look forward to today’s hearing on Intro 245, which will help to protect our nonprofits by providing exemptions from the tax lien sales list and requiring the City to better inform nonprofits about how they can stay off in the future.”