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Nonprofit leaders urge retroactive relief after missed-exemption filings; assessors warn of constitutional, procedural limits
Summary
House Bill 426 would allow some nonprofits to receive retroactive property tax exemptions for prior years when filing deadlines were missed for reasons of "accident, mistake or misfortune;" nonprofits described cases where late filings triggered large bills while assessors warned about retroactivity and legal limits.
House Bill 426, heard Feb. 4, would permit municipalities to accept previously late applications for nonprofit property-tax exemptions dating back to a specified prior tax year, allowing boards of selectmen to grant relief where organizations missed filing deadlines because of "accident, mistake or misfortune." Representative John McDonald, the bill’s sponsor, said the measure is intended to address nonprofits that miss the A‑9/A‑12 filing deadlines and face full tax bills without any opportunity for administrative relief.
The committee heard testimony from nonprofit leaders describing concrete harms. Andy Mako, chairman of the Wright Museum in Wolfeboro, described a year in which a staff member with a serious family medical problem missed a June filing and the museum was assessed for a year of property taxes totaling more than $50,000 — more than 10% of the museum’s revenue. "Given the circumstances described above, this seems to be a very severe penalty for late administrative filing," Mako told the committee and urged passage of HB 426.
Supporters, including Salvatore Prizzi of the Capitol Center for the Arts, said retroactive relief would spare organizations from sudden, large unexpected bills that divert funds from programming. Prizzi said his organization filed one of the required forms five days late for 2024 due to extenuating circumstances and that the resulting bill would be punitive.
Assessors and municipal counsel raised constitutional and procedural objections. Jim Michaud, Hudson’s chief assessor, testified the bill's retroactive scope may conflict with the state constitution's prohibition on retrospective laws and also noted that many municipal tax rates for 2024 have already been set, making post-hoc changes infeasible. "I don't know that a law can reach backwards to unspill the milk," Michaud said, and warned that Board of Tax and Land Appeals decisions already have upheld current deadlines in some cases.
The committee received mixed remote and in-room testimony and did not vote at the hearing.
