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CHARITIES: Measure getting closer look in Senate

Bill could erase nonprofit tax debts

Bill could erase nonprofit tax debts
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INDIANAPOLIS | Region nonprofits charged property taxes because of missing paperwork could get a clean slate under a plan being considered by state lawmakers.

About 15 to 20 charitable groups failed to file annual tax exempt forms with the county and were subsequently charged tax bills ranging from a few thousand dollars to more than $100,000, Lake County Commissioner Roosevelt Allen Jr. said.

"A lot of them are soup kitchens, a lot of them are programs that try to re-acclimate drug offenders into society. Some of them are drug-addiction programs," Allen said. "If we put obstacles and stumbling blocks in front of these organizations ... because the volunteers failed to file one form in a timely manner, to me it just does not make sense."

Allen reached out to state Rep. Vernon Smith, D-Gary, who is sponsoring legislation allowing state officials to forgive property tax debts charged to churches and other charitable groups. House Bill 1767 would give the Department of Local Government Finance the power to negotiate compromises, so the state wouldn't necessarily forgive the debts outright.

The legislation also would extend by two years -- to five years total -- the tax-free grace period on properties purchased by nonprofits that plan to convert the sites for charitable purposes.

The provision appears to benefit Smith's own IU Dons, an urban youth group owing taxes on dormant Gary properties. Smith says his nonprofit doesn't have the money to develop the properties and plans to forfeit them to the county.

"The IU Dons property, those buildings are ready to be demolished. They're has-beens," Smith said.

Lake County Treasurer John Petalas could not be reached Wednesday to determine the amount owed by IU Dons,

Allen said the list of charities charged taxes because of missing nonprofit paperwork include Image of Hope, which was deeded a former public school building in Gary, and SS. Peter and Paul Church in Merrillville.

Copyright 2012 nwitimes.com. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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