(AP) At the MacDowell Colony, where isolation spurs inspiration, artists emerge from their cottages at midday to find picnic baskets left quietly on their doorsteps. But when it comes to property taxes, the town insists there's no such thing as a free lunch.

For nearly a century, the famed artists' retreat has welcomed thousands of writers, composers and others who enjoy up to two months of rent-free solitude and support. Within its rustic stone and clapboard cottages, Thornton Wilder wrote "Our Town," Aaron Copland composed "Appalachian Spring" and Dobuse and Dorothy Heyward wrote "Porgy and Bess." More recently, Jonathan Franzen finished writing "The Corrections" and Alice Sebold worked on "The Lovely Bones."

For decades, the town considered the colony a tax-exempt charitable organization. But after reviewing similar groups from the hospital to the historical society, the Board of Selectmen decided the colony no longer is eligible for the exemption.

State law defines a charitable organization as one that advances "the spiritual, physical, intellectual, social or economic well-being of the general public or a substantial and indefinite segment of the general public that includes residents of the state of New Hampshire."

The MacDowell Colony certainly benefits its artists-in-residence, but "that doesn't strike us as being the general public," said Bob Derosier, one of the town's lawyers.

"From what we understand, their primary purpose is nurturing artists of the highest merit," he said.

Founded in 1907 by composer Edward MacDowell, the colony would owe $156,000 annually if taxed on the full value of its property, which includes 32 studios on 450 acres of woods and fields.

The colony now pays $9,000 a year in property taxes, on land not used for its central mission. But the town is sending a bill soon for $50,000, the amount it says would cover services such as snowplowing and police coverage. Selectmen initially were willing to accept just $17,000, but bumped the figure up and voted to take the matter to court after the colony refused to pay.

"The MacDowell Colony has a lot of road and they have their fair share of emergency calls, but they have refused to pay anything," said Selectman Liz Thomas. "A very nominal amount was suggested to get this to go away and they refused."

On the advice of its lawyer, the colony says it will pay the tax bill, then try to get a reversal when the case goes to court.

According to its 2004 annual report, the colony's endowment stands at $22 million, but more than $1 million must be raised every year to cover expenses, said David Macy, the colony's resident director.

"Most of it comes from individuals, most of it comes from outside this area and a lot of it is spent in this area," he said. "Having to raise all that extra money to turn around and pay it on taxes, I think it just sets off all kind of alarm bells about what are our values? Do we not have any shared values about the arts and literature?"'

As a writer who spent several weeks at MacDowell herself, Thomas knows and appreciates its mission. But she also feels for her constituents, particularly elderly residents on fixed incomes who are struggling to pay rising tax bills. Though she didn't vote on the MacDowell case, she believes the colony should join about half a dozen other nonprofits in town that make payments in lieu of taxes.

Macy believes the colony already provides programs worth more than what the town asked for, including workshops in the schools and monthly discussions led by the artists-in-residence. And he doesn't like the idea of turning the colony's relationship with the town into a "fee-for-service structure."

As for whether the colony benefits the public, Macy notes that anyone is free to apply. Nearly 1,700 artists did so between April 2004 and March 2005. The 257 who were accepted came from 31 states and 14 countries.

"There are a lot of people who live in area who've been in residence, lots of people from New Hampshire have been in residence and lots of people from all over the country," he said. "If that isn't an indefinite segment of the general population I don't know what is."

About a mile away from the colony in downtown Peterborough, auto mechanic Scott MacKenzie said he thinks the town is getting greedy.

"I lean more toward saying they should just leave well enough alone," he said.

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On the Net:

MacDowell Colony: http://www.macdowellcolony.org