EVALUATING PAYMENTS IN LIEU OF TAXES ACCORDING TO DESIRABLE FEATURES OF A TAX SYSTEM

Payments in lieu of taxes (pilots) are payments that tax-exempt nonprofits make voluntarily as a substitute for property taxes. In all cases, a primary characteristic of a PILOT is that it is voluntary; that is, no law requires such a payment. Although state requirements vary, charitable nonprofits...

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Bibliographic Details
Published in:Proceedings. Annual Conference on Taxation and Minutes of the Annual Meeting of the National Tax Association 2010-01, p.203
Main Authors: Kenyon, Daphne A, Langley, Adam H
Format: Article
Language:English
Subjects:
Costs
Municipal finance
Municipalities
Payments
Property taxes
Tax exempt organizations
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Summary:Payments in lieu of taxes (pilots) are payments that tax-exempt nonprofits make voluntarily as a substitute for property taxes. In all cases, a primary characteristic of a PILOT is that it is voluntary; that is, no law requires such a payment. Although state requirements vary, charitable nonprofits are exempt from property taxation for property they own and use for an exempt purpose in all 50 states. To gather information on PILOT usage, the authors started with a 1998 survey of municipal finance directors and key community leaders in 73 large cities across the US, which found PILOTS in seven large cities in six. Google's search engine and a comprehensive literature review were then used to ascertain that PILOTs were still collected in those large cities, and to compile a longer list that included smaller municipalities that host a nonprofit that plays a major role in the town's economy such as Lebanon, New Hampshire, which receives payments from the Dartmouth-Hitchcock Medical Center.
ISSN:1549-7542
2377-567X