Business

Association Agenda: Taxing Work on Tax Reform

Association execs take their tax reform concerns to the Hill.

While many Capitol Hill observers remain doubtful that Congress will usher through a comprehensive overhaul of the tax code in an election year, that hasn’t stopped associations from weighing in on the discussion draft produced by the top tax writer in the House.

The draft plan, released in February by House Ways and Means Committee Chairman Dave Camp (R-MI), includes several policy prescriptions that would affect the tax-exempt community, including a provision to make royalties from the sale or licensing of an organization’s name or logo subject to tax.

Another provision modifies the unrelated business income tax (UBIT) exception for qualified sponsorship payments in two respects: First, if an organization’s acknowledgement of a sponsor refers to any of the sponsor’s product lines, the payment would be treated as advertising income and would be subject to UBIT; second, if an organization receives more than $25,000 in qualified sponsorship payments for any one event, the acknowledgement of a sponsor must be substantially the same as that of other donors to the event.

Participants in ASAE’s American Associations Day in March brought up both provisions in congressional office visits. Lobbyists for many associations are worried that even if Camp’s plan doesn’t see a floor vote this year, it could become a menu of revenue raisers that lawmakers could select from to offset other legislative priorities. And even if tax reform has to wait until 2015, Camp’s plan is bound to be the conversation starter whenever Congress decides to act.

Camp has promised to hold hearings and still hopes for a committee markup later this year. Given the potential implications for their bottom lines, associations should not waste opportunities to explain to lawmakers how the Camp plan might affect their operations.

(iStock/Thinkstock)

Chris Vest, CAE

By Chris Vest, CAE

Chris Vest, CAE is vice president, corporate communications and public relations at ASAE. MORE

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