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Nonprofit Organization Property Owners Client Alert

April 9, 2015

As a result of the Ordinance, in February of 2015, the OPA issued letters to approximately 6,500 Philadelphia tax-exempt property owners. The letter required the property owner to complete a two-page certification form and provide numerous supporting documents. The letter gave the property owner a response deadline of March 31, 2015, or risk losing its tax-exemption commencing January 1, 2016. 
 
The Ordinance and the subsequent letters issued to property owners by the OPA caused an immense outcry from Philadelphia’s nonprofit community. As a result of which Philadelphia City Council held hearings on February 27, 2015. During the hearings City Council introduced two bills as a means of addressing the nonprofit communities concerns. The first bill was introduced by Councilwoman Jannie Blackwell. This bill seeks to eliminate the annual certification requirement. The second bill introduced by Councilman David Oh, would reduce the annual certification requirement to once every three years and would also extend the deadline to respond to the OPA to June 30, 2015. 
 
In response to the nonprofit community’s criticism of these new requirements, the OPA extended the current response date to June 1, 2015, and dropped the supporting documentation requirements to only require an IRS 501(c)(3) determination letter with the two-page certification form. 
 
While the bill introduced by Councilman David Oh has since been tabled, the bill introduced by Councilwoman Jannie Blackwell was passed by City Council on March 26, 2015. The bill is now in the hands of Mayor Nutter who has two weeks in which to sign the bill, veto the bill, or do nothing. Two out of the three (signing the bill or doing nothing) will result in this bill becoming law and would essentially eliminate this new Ordinance. 
 
Although the Mayor may elect to veto the bill, since it was passed by City Council with a vote of 16-0, and only 12 votes are required to override the veto, it seems highly likely the bill introduced by Councilwoman Jannie Blackwell will  pass. 
 
Subject to the passage of the bill introduced by Councilwoman Blackwell, tax-exempt property owners in Philadelphia will be obligated to respond to the OPA’s annual certification request by June 1, 2015.
 
If you have any questions, please contact either Gary A Zlotnick at 215 569 2800, ext. 1114, or Rachael Pritzker at 215 569 2800 ext. 1143.
 

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