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HB 448

TAX/AD VALOREM-EXEMPTION: (Constitutional Amendment) Prohibits ad valorem tax exemptions for property owned by nonprofit organizations used for commercial purposes (OR SEE FISC NOTE LF RV)

2025 Regular Session Introduced by Mandie Landry

Constitutional amendment eliminating property tax exemptions for nonprofits when property is used commercially, potentially increasing local tax revenue but reducing nonprofit funding sources.

Read by title, under the rules, referred to the Committee on Ways and Means.
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Bill Summary · HB 448

Legislative bill overview

HB 448 proposes a constitutional amendment that would eliminate ad valorem (property) tax exemptions for nonprofit organizations when their property is used for commercial purposes. Currently, many nonprofits receive property tax breaks regardless of how their property is used; this bill would remove that exemption when commercial activity is involved.

Why is this important

Property tax exemptions for nonprofits represent foregone tax revenue that municipalities must compensate for through other means or reduced services. This amendment could significantly increase tax revenue for local governments while potentially affecting nonprofits that operate bookstores, cafés, rental facilities, or other income-generating operations on their premises.

Potential points of contention

  • Definition ambiguity: "Commercial purposes" could be interpreted broadly or narrowly—does a nonprofit's gift shop count? A café in a hospital? Unclear language could create litigation and inconsistent application.
  • Nonprofit funding pressure: Many nonprofits rely on revenue from auxiliary commercial activities to fund their charitable missions; this could reduce their operational capacity and require service cuts.
  • Constitutional amendment burden: Amending the state constitution is a high bar requiring legislative supermajority and voter approval, suggesting sponsors view this as fundamental policy change rather than routine tax adjustment.

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

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