Platte Institute Releases Report on Nebraska’s Tax Treatment of Non-Profits 

OMAHA, NE — The Platte Institute has released a new report examining how Nebraska’s tax code treats non-profit organizations and the growing implications for state and local tax bases.

“Nebraska’s Tax Treatment of Non-Profits" provides a detailed analysis of federal and state-level tax exemptions, including property and sales tax advantages for business-like entities such as hospitals, universities, and utilities. 

While many non-profits were originally granted favorable tax treatment to promote charitable
missions, the report highlights how modern non-profit enterprises often resemble for-profit competitors while maintaining broad tax exemptions. For example, non-profit hospitals, universities, and even gyms frequently charge fees for services or memberships, placing them in direct competition with taxpaying businesses. Nationwide, non-profits now make up 15% of the U.S. economy and manage more than $8 trillion in assets. 

In Nebraska, the report finds that property and sales tax exemptions for non-profits are significant. According to the 2024 Nebraska Tax Expenditure Report, purchases by churches, nonprofit colleges, and medical facilities account for more than $250 million in foregone sales tax revenue annually. 

“Tax exemptions for truly charitable work are justified,” said Platte Institute Chief Executive Officer Jim Vokal. “But when business-like entities use non-profit status to compete with taxpaying enterprises, or consume local services without contributing to their cost, it’s prudent to examine how those exemptions are structured, especially in the property tax environment in Nebraska.” 

The report outlines several policy options for Nebraska lawmakers, including: 
*Reviewing sales tax exemptions for non-profit sales that directly compete with for-profit goods and services. 
*Considering payments in lieu of taxes (PILOTs) to help fund local services used by large non-profit property owners. 
*Studying the overall value of non-profit exemptions relative to their public benefit to ensure fairness across taxpayers. 

“Policymakers should understand the national landscape and how Nebraska compares,” Vokal added. “Nebraska’s property tax ranking is the 4th highest in the country, and this information is invaluable when understanding our tax structure.” 

Nebraska’s Tax Treatment of Non-Profits is available now by clicking  here.