{"id":279278,"date":"2026-09-04T22:40:09","date_gmt":"2026-09-04T22:40:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/us-pa\/279278\/"},"modified":"2026-09-04T22:40:09","modified_gmt":"2026-09-04T22:40:09","slug":"scranton-tax-appeal-challenge-reverses-nonprofit-status-of-four-entities","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us-pa\/279278\/","title":{"rendered":"Scranton tax appeal challenge reverses nonprofit status of four entities"},"content":{"rendered":"

The city of Scranton and the Scranton School District won their challenges of tax-exempt statuses of four nonprofit entities in the city.<\/p>\n

The city and SSD in July jointly filed legal actions called \u201creverse exemption appeals\u201d including one against Scranton Liederkranz Co. (508 Lackawanna Ave.), and two each against Milk Saving Starving Children (a restaurant property at 801 N. Washington Ave. and a vacant parcel at 400 Gibson St.), Simrell Park Association (627 Madison Ave. and 629-631 Madison Ave.), and 20th Ward Social and Athletic Club (2028 Pittston Ave. and an undeveloped property at Birney Avenue and Gibbons Street).<\/p>\n

Filed with the Lackawanna County Board of Assessment Appeals, the challenges claimed the entities do not qualify for property tax exemptions. The city reached a settlement with Milk Saving Staving Children to put it on the tax rolls in 2027; and the assessment board on Aug. 27 determined the other three entities also should be reclassified as taxable, effective in 2027.<\/p>\n

\u201cWe have been working for several years to evaluate tax exemptions across the city,\u201d Scranton Mayor Paige G. Cognetti said in an announcement on Aug. 28. \u201cReclassifying and properly taxing these properties will not only get overdue revenue to the city and the school district \u2014 this is about fairness and making sure everyone pays their fair share for local government services.\u201d<\/p>\n

\"Scranton<\/p>\n

Scranton Liederkranz Co. on 508 Lackawanna Ave. in Scranton on Monday, July 27, 2026. (JASON ARDAN \/ STAFF PHOTOGRAPHER)\n<\/p>\n

\"801<\/p>\n

801 N Washington Ave. in Scranton on Monday, July 27, 2026. (JASON ARDAN \/ STAFF PHOTOGRAPHER)\n<\/p>\n

\"Twentieth<\/p>\n

Twentieth Ward Social and Athletic Club on 2028 Pittston Ave. on Monday, July 27, 2026. (JASON ARDAN \/ STAFF PHOTOGRAPHER)\n<\/p>\n

Show Caption<\/p>\n

1 of 3<\/p>\n

Scranton Liederkranz Co. on 508 Lackawanna Ave. in Scranton on Monday, July 27, 2026. (JASON ARDAN \/ STAFF PHOTOGRAPHER)\n<\/p>\n

Expand<\/a><\/p>\n

The appeals stems from the city\u2019s first tax-exemption-verification review launched in December 2023. This initiative reviews and verifies the tax-exempt status of nonprofit and government-owned properties by conducting what\u2019s known as a HUP test. At that time, in 2023, the city had 1,622 tax-exempt properties that accounted for nearly 37%, or about $220 million, of Scranton\u2019s $598 million total assessed property value. Nearly 6% of Scranton\u2019s 27,000-plus parcels were off the tax rolls.<\/p>\n

The HUP test, which gets its name from a landmark 1985 state Supreme Court decision in Hospital Utilization Project v. Commonwealth, established five prongs an organization must meet to qualify as a tax-exempt charity under the state constitution. The test holds that to be considered a purely public charity, the entity seeking a tax exemption must advance a charitable purpose, donate or render gratuitously a substantial portion of its services, benefit a substantial and indefinite class of people who are legitimate subjects of charity, relieve the government of some of its burden and operate entirely free from profit motive.<\/p>\n

The county assessment board over the past year or so twice issued letters to all of the nonprofits in the city to verify their tax-exempt statuses. Many responded and many did not. The four that were challenged had not responded and became the first entities that faced appeal challenges from the city and school district contending that none met the HUP test for tax-exemption.<\/p>\n

The challenges also followed the first countywide reassessment in Lackawanna County since 1968. Based on revised 2026 assessments and city and school district millage rates of 6.35 and 9.56, respectively, the city estimates the successful tax challenges will produce a total of $31,332 in tax revenue to the two governing bodies in 2027, or $12,507 to the city and $18,825 to the school district.<\/p>\n

They did not calculate county taxes to be collected, because the county was not a party to the original tax-exempt challenge.<\/p>\n

A retroactive clawback of taxes not paid in prior years also is not possible, officials said.<\/p>\n

The city and school district might pursue other, similar challenges of nonprofit statuses, the city\u2019s announcement said.<\/p>\n","protected":false},"excerpt":{"rendered":"The city of Scranton and the Scranton School District won their challenges of tax-exempt statuses of four nonprofit…\n","protected":false},"author":2,"featured_media":279279,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[15],"tags":[201,182,139,28,178,180,179,181],"class_list":["post-279278","post","type-post","status-publish","format-standard","has-post-thumbnail","category-scranton","tag-lackawanna-county","tag-local-news","tag-news","tag-pennsylvania","tag-scranton","tag-scranton-headlines","tag-scranton-news","tag-top-stories-stt"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/posts\/279278","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/comments?post=279278"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/posts\/279278\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/media\/279279"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/media?parent=279278"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/categories?post=279278"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/tags?post=279278"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}