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Amendment Would Limit Community Ability To Challenge Tax-Exempt Status

February 14, 2013

An attempt in the state Senate to limit challenges by Pennsylvania communities to the status of tax-exempt organizations has passed committee by a 9-2 vote.

The push is for an amendment to the state Constitution that would clarify the definition of a public charity.  The bill would place the issue before voters in the form of a referendum question and, if passed by voters, would give the state legislature the sole authority for establishing the criteria for an organization’s tax-exempt status.

The proposed amendment, which now goes to the full Senate, would require passage in two consecutive legislative sessions before it could be placed on the ballot.  Many representatives of statewide municipal officials associations oppose the bill, saying it could impose unfair tax burdens on their communities’ residents and businesses.

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