Pittsburgh Property and Payroll Preparation Taxes for Nonprofits
Nonprofits in the city of Pittsburgh (and other jurisdictions in Pennsylvania) do not currently pay property or payroll preparation taxes. However, Pittsburgh is currently a distressed municipality under Act 47 oversight, and needs to raise new revenue. Because of this, the city has rhetorically and legally challenged existing tax exemptions for certain large nonprofit organizations that generate significant revenue. Prior to the city’s legal challenge, 41 nonprofit organizations contributed anonymously to the Public Service Fund. The Public Service Fund was voluntary, and members rejected classifying the payments as “Payments in Lieu of Taxes” (PILOTs) in order to avoid the payments being viewed as a form of taxation. The Pittsburgh Public Service Fund expired at the end of 2013, and the city currently receives no money from it. Mayor Bill Peduto is hoping to work out a long-term solution to this issue.
GPNP, in partnership with the Allegheny County Bar Association’s Committee on Exempt Organizations will be educating its members on this issue. The first session was held on September 23, 2014.
Pittsburgh Mayor Peduto's 2016 budget did not contain a PILOTs as a revenue source.
Allegheny County Assessment
Allegheny County requires non-profit organizations to submit a statement justifying their tax-exempt status. See information about 2013 Exempt Status Review.
In February 2015, Allegheny County issued its first wave of tax bills to nonprofits that it deemed ineligible for a tax exemption. According to the Pittsburgh Post-Gazette:
After the county sent out two letters in 2013 asking the owners of 2,800 parcels that claimed a charitable tax exemption to respond and tell it why they deserved an exemption, 20 owners self-reported they were taxable, and another 170 didn’t respond and automatically went back on the tax rolls as a result. That put $59 million in new property back on the tax rolls — at least for 2014. And most of those property owners have already paid, pumping nearly $200,000 in new property tax revenue into the county’s coffers. More than $1 million combined has also gone to local municipalities and school districts — with a promise of at least double that if delinquent tax payers pay up.
The Pittsburgh Post-Gazette's coverage is available here.