Payment in Lieu of Tax Payment

In recent years, local communities have felt increasing pressure to raise local tax receipts to offset reductions in state aid and other forms of state and federal assistance. As a result, exempt organizations such as colleges, hospitals, and museums have become primary targets for payment in lieu of tax (PILOT) requests and agreements. The City of Boston, for example, has implemented a formal PILOT program, which attempts to obtain voluntary payments from exempt organizations based on consideration of several factors, including hypothetical assessed valuations, community service benefits provided by exempt organizations, and existing voluntary tax payments that are being paid on exempt properties.

Lynch, DeSimone & Nylen has extensive experience in representing teaching hospitals, colleges, museums, and other exempt organizations in PILOT negotiations with local cities and towns. Our representation in these matters incorporates our expertise in valuation matters, the starting point in any discussion concerning a PILOT. In addition, we have added substantial value for our exempt clients through our identification and quantification of community service benefits that serve to reduce annual PILOT Payments. By taking a multi-disciplinary approach to PILOT discussions, we have been successful in obtaining extremely favorable PILOT arrangements while also maintaining positive relationships between our clients and local governments.