The Property Tax Exemption for Nonprofits

39 Pages Posted: 29 Aug 2008

See all articles by David L. Sjoquist

David L. Sjoquist

Georgia State University

Rayna Stoycheva

affiliation not provided to SSRN

Date Written: July 2008

Abstract

This paper reviews the existing literature on the property tax exemption for nonprofit organizations and identifies gaps to be addressed in future research. We start by examining justifications and existing eligibility criteria for the property tax exemption, followed by studies of the magnitude of the revenue loss from the exemption. We focus on theoretical and empirical studies of the economic effects of the exemption. We consider the effect of the tax advantage on nonprofit decisions about inputs, outputs and organizational form, decisions to rent or own, location decision, market share, and the effect of the exemption on neighboring property values. Finally, we evaluate research about the use of PILOTs and the implications of their possible expansion. We conclude that future studies need to examine further the magnitude of the revenues forgone, the advantages and disadvantages of PILOTs, and other solutions for distributing more evenly the burden of the exemption. Further studies are also needed to understand the economic effects of the property tax exemption, with opportunities for theoretical and empirical contributions.

Suggested Citation

Sjoquist, David L. and Stoycheva, Rayna, The Property Tax Exemption for Nonprofits (July 2008). Andrew Young School of Policy Studies Research Paper No. 08-15. Available at SSRN: https://ssrn.com/abstract=1260297 or http://dx.doi.org/10.2139/ssrn.1260297

David L. Sjoquist (Contact Author)

Georgia State University ( email )

P.O. Box 3992
Atlanta, GA 30302-3992
United States
404-413-0246 (Phone)

HOME PAGE: http://frp.aysps.gsu.edu/sjoquist/index.html

Rayna Stoycheva

affiliation not provided to SSRN ( email )

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