What are PILOTs?

Summary:

"Payments in Lieu of Taxes" is the name given to fees that are sometimes charged by governments to cover the cost of providing services to otherwise tax-exempt organizations. They are controversial.

Answer:

The Association of Fundraising Professionals (then called the National Society of Fund-Raising Executives) issued a position paper in 1996 explaining PILOTs and explaining why that organization opposes them. See http://www.afpnet.org/content_documents/PILOT_position_paper.pdf

The Urban Institute Press published Property-Tax Exemption for Charities: Mapping the Battlefield, edited by Evelyn Brody in 2002. The essays in this volume discuss PILOTs along with many other contentious issues about the various tax exemptions (and restriction on them) that apply to nonprofits in localities in the US. (For a review of this book by Putnam Barber that discusses several of the issues with an emphasis on Washington state, see http://www.tess.org/ON/020729ON.htm.)

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Posted 8/10/05 -- PB