Congress is preparing to pass a temporary spending bill to keep the government running through December 20. That continuing resolution could be a vehicle for repealing a burdensome nonprofit benefits tax, say ASAE and the UBIT Coalition.
In a letter [PDF] to House and Senate leaders delivered November 13, ASAE and its UBIT Coalition urged lawmakers to include repeal of the 21 percent tax on parking and transportation benefits that tax-exempt organizations provide to employees in the short-term continuing resolution that Congress is set to pass in the next few days.
Repealing the nonprofit benefits tax, which was enacted as part of the 2017 Tax Cuts and Jobs Act, has been ASAE’s top legislative priority this year. The coalition says the tax is proving to be a burden for associations and other nonprofit groups, including churches and small charities that have little or no experience dealing with the IRS and insufficient guidance on how to calculate the value of parking and other benefits provided to their employees.
“Tax-exempt organizations, which include houses of worship, charitable organizations, nonprofits and associations, rely on limited resources to pursue their missions in public service,” the ASAE-UBIT Coalition letter said. “Missions that serve communities and families, promote safety, offer spiritual and emotional/relational care, and myriad other services are jeopardized by this tax.”
Repealing the tax has broad support from both Republicans and Democrats, and a repeal provision was included in a tax package passed by the House Ways and Means Committee in June. That package has not yet been voted on by the full House, however, and ASAE and the coalition are pushing for action before the end of the year.
The UBIT Coalition comprises more than 115 local and regional tax-exempt organizations, including associations, faith-based groups, and charitable nonprofits. A report commissioned by coalition member Independent Sector earlier this year revealed that the benefits tax will divert an average of $12,000 away from each nonprofit’s mission per year.