"Payments in Lieu of Taxes" (or PILT) are Federal payments to local governments that help offset losses in property taxes due to nontaxable Federal lands within their boundaries. The key law that implements the payments is Public Law 94-565, dated October 20, 1976. This law was rewritten and amended by Public Law 97-258 on September 13, 1982 and codified at Chapter 69, Title 31 of the United States Code. The Law recognizes that the inability of local governments to collect property taxes on Federally-owned land can create a financial impact.

PILT payments help local governments carry out such vital services as firefighting and police protection, construction of public schools and roads, and search-and-rescue operations. The payments are made annually for tax-exempt Federal lands administered by the BLM, the National Park Service, the U.S. Fish and Wildlife Service (all agencies of the Interior Department), the U.S. Forest service (part of the U.S. Department of Agriculture), and for Federal water projects and some military installations. PILT payments are one of the ways that the Federal government can fulfill its role of being a good neighbor to local communities.

The Department of the Interior's (DOI) Office of the Secretary has administrative authority over the PILT program. In addition to other responsibilities, DOI will calculate payments according to the formulas established by law and distribute the funds appropriated by Congress. Applicable DOI regulations pertaining to the PILT program were published as a final rule in the Federal Register on December 7, 2004.

The formula used to compute the payments is contained in the PILT Act and is based on population, receipt sharing payments, and the amount of Federal land within an affected county. PILT payments are in addition to other Federal revenues (such as oil and gas leasing, livestock grazing, and timber harvesting) that the Federal Government transfers to the States. The DOI has distributed more than $5.9 billion dollars in PILT payments (on average, $164.5 million annually) to each State (except Rhode Island) plus the District of Columbia, Puerto Rico, Guam, and the Virgin Islands since these payments began in 1977.

See the news release announcing the 2012 PILT payments, as well as a breakdown of PILT payments by State only or by State and County.

For questions about the PILT program or payment computation, please contact:
Niall O'Connor
202-513-7785

Important News for FY 2013 PILT Payments

• 2/19/2013: Please visit the SAM Bulletin for new information about receiving Federal payments by electronic transfer and check in FY 2013.