Pa May Give Lawmakers The Decision On Who Gets Tax Exempt Status

04.22.13 | Sarah Harnisch

A bill quietly circulating in the state Legislature would change Pennsylvania's constitution to allow state lawmakers rather than the judicial system to decide what nonprofit entities deserve tax-exempt status. The state Senate passed the bill 30-20 last month and the House Finance Committee has approved a version. Because the measure would amend the state constitution, it must pass both houses in consecutive legislative sessions and would then have to go before the voters for approval.

Supporters say the measure, which would give lawmakers the final say on what is a "purely public charity" eligible for tax exemption, would provide statewide consistency in defining what is or isn't a charity and keep nonprofits from being subject to different court rulings in different parts of the state.

Opponents, however, call it an end-run by large nonprofits to shift tax exemption authority to state legislators and away from communities that have shown increasing willingness to go to court to force hospitals, universities and other nonprofits to contribute.