Loudoun County supervisors voted to end their moratorium on granting property tax exemptions for nonprofits Wednesday night, after a heated debate over whether the decision would open the door to significant loss of revenue for the county.
Virginia law gives local governments the right to determine whether certain nonprofit organizations qualify for a tax exemption, and many counties have responded by putting in place a blanket restriction for any new organizations, requiring them to pay property taxes.
Some nonprofit leaders in the county have complained that the rule places an unfair burden on them as they struggle to raise money to help the county’s neediest residents.
Board of Supervisors Chairman Scott York (R) proposed lifting the moratorium — in place since 2008 in Loudoun and upheld as recently as last month — and inviting nonprofits to apply for an exemption this spring.
“We should as a community thank them for the good work they do and not have them worrying about paying property taxes when they’re out there trying to fundraise,” he said.
At Wednesday night’s meeting, Supervisor Shawn Williams (R) warned that this would be a slippery slope. He said he wasn’t looking forward to the discussions that supervisors would have in the spring about which organizations deserved a tax break and which did not.
Supervisor Matthew Letourneau (R) said lifting the moratorium would undo the work the board had done to establish a fair process for funding nonprofits through grants, and he warned that it would be “Christmas in Loudoun County” as charities rushed to apply for tax breaks.
Supervisor Suzanne Volpe (R) asked the board: “You’re worried about losing revenue from nonprofit, 501(c)(3) organizations, but aren’t we supposed to be fiscal conservatives? Are we supposed to encourage the private sector to do stuff, not have the government do everything?”