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Bill

H 3264

An Act relative to payments in lieu of taxation by organizations exempt from the property tax

194th Legislature (2025-2026) Introduced by Christine Barber and 2 co-sponsors

Requires tax-exempt organizations to pay municipalities for services, shifting some property tax burden from residents and businesses to nonprofits, schools, and hospitals.

Accompanied a study order, see H5238
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Bill Summary · H 3264

Legislative bill overview

H 3264 requires tax-exempt organizations (such as nonprofits, educational institutions, and religious organizations) to make payments in lieu of taxation (PILOT) to municipalities where they operate. The bill standardizes how these organizations contribute to local governments that provide services they use but don't pay property taxes to support.

Why is this important

Municipalities lose significant tax revenue from large tax-exempt properties, which shifts the property tax burden to homeowners and businesses. This bill addresses a decades-old tension between cities/towns seeking revenue and exempt organizations arguing they provide public benefits that offset their tax status. The outcome affects local school funding, infrastructure maintenance, and overall municipal finances.

Potential points of contention

  • Scope and fairness: Determining which organizations should pay and at what rates—religious institutions and small nonprofits may argue they lack resources, while larger universities and hospitals face questions about why they shouldn't contribute more
  • Voluntary vs. mandatory: Whether PILTs should be mandatory legal obligations or remain negotiated agreements between organizations and municipalities, which affects predictability for both parties
  • Economic impact: Concerns that increased costs will reduce nonprofit services, raise college tuition, increase hospital bills, or force some organizations to relocate to tax-friendly jurisdictions

Compiled from official sources — confirm details with the bill’s official record.

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