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Nonprofits recount six-figure penalties as Senate hears House Bill 426 to allow retroactive relief for late filings
Summary
Nonprofit leaders told the Senate committee that late administrative filings cost their organizations tens or hundreds of thousands of dollars; House Bill 426 would allow select boards to excuse late filings for filings due in specific prior periods, with appeal rights to the Board of Tax and Land Appeals or superior court.
Representative John McDonald introduced House Bill 426 as a narrowly targeted, retroactive measure to give nonprofits relief for certain late A-9/A-12 tax-exemption filings. He said the bill is intended as a “bridge” for organizations that were late filing between specified dates and to allow select boards to consider appeals based on “accident, mistake, [or] misfortune.”
Nonprofit leaders described severe consequences after late filings. Peggy Henley Maniatas, executive director of the Wright Museum of World War II, told senators the museum lost its tax exemption for one year and “the cost of $50,000 in real estate taxes. This is more than 10% of our entire budget for the year.”
Salvatore Perizzio, executive director of the Capitol Center for the Arts, said his organization’s second filing was five days late while his assistant was dealing with a spouse’s heart attack; as a result the organization faces a bill of about $150,000. “We filed it. It was 5 days late,” Perizzio said, arguing the penalty was disproportionate and “incredibly punitive and damaging to organizations like ours.”
Representative McDonald and other supporters said the bill preserves municipal oversight — select boards could grant relief, and denied applicants could appeal to the Board of Tax and Land Appeals or the superior court. Supporters said the change is intended to protect volunteer-run and small nonprofits that provide economic and cultural activity in towns.
Opponents or municipal staff were not prominent in the hearing record on this bill; the committee debated retroactivity, fiscal impacts, and whether the proposed one-year retroactive relief would set an unfortunate precedent. The committee later recorded a motion on the bill; in the excerpt the chair announced a motion “ought to pass” moved by Senator Lang and seconded by Senator Roseburg; the ayes reportedly carried the motion and the committee moved the bill by consent. The transcript indicates members planned further work on related measures but recorded the committee action as passed to the next stage by consent.
