Missed deadline leaves nonprofit footing $15,000 tax bill in NL

City officials give OIC 10 years to pay off debt

New London — The city has granted the Opportunities Industrialization Center of New London 10 years to pay back the $15,000 it owes in taxes for its 106 Truman St. building.

The OIC, as it is known, is a tax-exempt nonprofit, but city officials said two of its nonprofit tenants — the NAACP of New London and New London Area Food Pantry — failed to file the proper M3 tax exempt application with the city in 2017.

The result was that 21 percent of the OIC property became taxable for the 2017 Grand List.

Tax Assessor Paige S. Walton said in an email that it was beyond her purview and authority to consider tax forgiveness for nonprofits that failed to file in a timely manner and she is bound by state statute.

Walton, Mayor Michael Passero, City Attorney Jeffrey Londregan and representatives from the organizations in question met last month to hash out a solution and to ensure the correct paperwork was submitted for future assessments.

“We approached the situation in a problem-solving manner. There was nothing punitive about it. We went to the limits of the law to remedy the situation,” Passero said. “The only option we have is to waive the interest and penalties and give them 10 years to pay back the taxes.”

State law requires that all nonprofits file for exemption every four years. The latest deadline was Nov. 1, 2017. Walton said there were just five organizations in New London denied tax-exempt status because they failed to hit the deadline. One of those organizations was later granted an exemption by the Board of Assessment Appeals and the other four had small personal property bills and paid their taxes.

The City Council last week approved by a 6-1 vote the 10-year payment plan. Michael Tranchida, who wanted more information on how many nonprofits and other entities rented space at the OIC building, voted against the measure.

OIC board member Beth Hogan indicated at the Feb. 4 council meeting that OIC and its tenants did not have the financial means to pay the entire bill in one installment.

The OIC, in fact, made a public appeal in December for a boost in funding to help close an estimated $70,000 budget gap and help maintain its free job skills programs.

The OIC, according to information previously provided to The Day, operates on a nearly $600,000 budget that comes through the federal Department of Labor, state Department of Social Services, the Eastern Connecticut Workforce Board, United Way, Community Foundation of Eastern Connecticut and private grants and donations.

Hogan said the OIC understands it is ultimately liable for the tax payment and would work with its tenants to pay off the bill as fast as it could. Councilor Alma Nartatez asked if the OIC was working on putting safeguards in place to avoid the situation from happening again. Hogan said that work is in progress.

A similar incident occurred on a larger scale in Norwich last year when the assessor there denied tax-exempt status for about three dozen nonprofits that missed tax-filing deadlines. After a public outcry, special legislation was signed that gave the entities an extension to refile.

NAACP President Jean Jordan said to the best of her knowledge her organization never had received notice of the requirement to file for tax exemption.

“This is the first we’ve heard about this,” Jordan said. “We have the paperwork now. We’re in the process of taking care of it.”

She said the NAACP uses a small office space in the building and called the OIC a “great partner for us over the past couple of years.

A representative from the New London Area Food Pantry was not available to comment.