An overview of all options under consideration is available from the Minnesota Budget Project. In addition, the Department of Revenue has briefing papers addressing reform options in more detail. Revenue wants to provide more uniformity of definition across jurisdictions and better instructions to assessors on how to determine if a property is exempt. North Star is the current case law definition to determine exempt status, looking at seven factors, including the organization s purpose, whether it is supported by donations and gifts, and whether recipients of the charity are required to pay for services. Adopt 501c3 criteria.
Revenue seems to be leaning towards tightening up the definition.
Impact on Nonprofits Option 1 would significantly narrow the exemption. Option 2 may also be a significant narrowing of the exemption, depending on how it is put into law. Option 3 would expand the definition and make it more like the exemption for sales and income tax. Features Some exempt entities currently enter into voluntary agreements with local governments to make payments in lieu of taxes. Revenue believes changes are needed to allow local units of government to diversify funding sources and address the principle that taxes paid should reflect services received.