Rhode Island Senate Bill S2600

Rhode Island 2022 Regular Session

• Introduced: 3/10/22
• Refer: 3/10/22

Caption

Property Subject To Taxation

Impact

If enacted, S2600 would have a profound impact on both local government budgets and the operations of nonprofit entities across Rhode Island. There are provisions for cities and towns to impose property taxes on vacant lots, buildings, and other properties belonging to nonprofit colleges and hospitals not exclusively used for their stated tax-exempt purposes. The bill recognizes that throughout the years, the entities have expanded their property holdings to include spaces used for non-educational or non-medical revenue-generating activities.

Summary

Bill S2600, introduced in the Rhode Island General Assembly, seeks to modify the tax-exempt status of certain properties owned by nonprofit institutions, specifically colleges and hospitals. Historically, these entities have benefitted from significant exemptions that have led to substantial portions of their property remaining untaxed. This bill aims to rectify potential abuses of these exemptions, particularly where properties are used for commercial ventures rather than strictly for their nonprofit purposes. Such amendments reflect a growing concern regarding fiscal equity among the residents of municipalities where these institutions are located.

Contention

The bill has sparked a debate regarding the extent to which nonprofit organizations should carry a tax burden. Supporters argue that these institutions must contribute their fair share, given their economic footprint in local communities, while critics claim that imposing taxes could detract from the mission of these institutions and impede their ability to provide community services. Additionally, questions remain about how local governments administer these new taxation policies and ensure compliance without compromising the intended supports for community health and education.