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Senate panel weighs House Bill 421 requiring earlier notice to nonprofits on tax-exemption filings; municipalities split
Summary
House Bill 421 would require towns to mail nonprofit tax-exemption A-9/A-12 forms no later than two months before the due date; sponsors called it a commonsense fix after organizations lost exemptions, while some municipal managers said it unfairly shifts administrative burdens to towns.
Mark Pearson, the bill sponsor, told the committee he introduced House Bill 421 in response to instances in which nonprofits lost tax-exempt status after missing administrative filing deadlines. He described the measure as “trying to make this a cooperative venture” and said the bill requires localities to mail forms at least two months before they are due so small charities run by volunteers get timely notice.
Pearson said towns and charities historically relied on informal practices and “gentleman’s agreements” and that the bill’s mailing requirement would reduce inadvertent lapses. “This just says line 7 and 8, the towns have some responsibility in this as well,” he told senators.
Town of Raymond Manager Ken (last name not specified in testimony) opposed the provision, saying it would create an onus on taxpayer-funded employees to track charities’ filings. “We believe that it's not on the onus of the town to keep track of tax exempt organizations,” he said. He told the committee municipal staff already have significant workloads and suggested posting notice on a town website or other regular public notice methods instead of individual mailings.
Senators discussed alternative approaches. Senator DeWine asked whether posting notice two months in advance — the same way municipalities publish meeting notices — would be acceptable; Raymond’s manager said that method would be acceptable. Some members noted larger cities already use phone calls and outreach to notify organizations; others worried adding mailings could strain smaller municipal offices.
The committee did not reach a final vote on the bill at the hearing. Chair and members agreed to hold the bill for a week to gather further information and to allow senators time to consider whether a posting requirement would be an acceptable compromise to a mandatory mailing.
