Over the past couple of weeks, ASAE – supported by associations around the country – has worked to remove the provision in the Senate tax bill to tax associations’ royalty income. Thank you to all who joined the effort.
We are pleased to report that the royalties provision has been removed from the final Senate bill, which passed before 2:00am this morning by a 51-49 vote. It took the work of association professionals from across the country to make this important change happen. We have heard anecdotally that this was the issue that members of the Senate Finance Committee have heard about most from constituents in recent days.
Thank you to the entire community for sharing with Congress The Power of A: associations make the world smarter, safer, and better every day. Our organizations serve a vital purpose and have expertise and knowledge that can be applied to solving the world’s most pressing problems. To find out more about The Power of A or to become a Power of A Ambassador click here.
Still, it is too early to declare victory. The bill is not yet final. There is still a risk that in a search for revenue the royalties provision could be added back as the conference committee begins to reconcile the House and Senate versions of the legislation.
With strong association support the provision eliminating nonqualified deferred compensation plans was removed in the House and Senate committee markups. There is also a risk this provision could be added back during the conference process.
We also have concerns that tax issues will be addressed in the omnibus spending bill in early December, and that provisions impacting the association community may be looked at as revenue sources. We need your continued help to remind Congress how royalties and nonqualified deferred compensation plans impact the association community. If your association is impacted we encourage you to share our talking points on royalty arrangements as well as the specific stories we have collected from many of you about how the taxation of royalty income would affect various associations. These have proven to be extremely helpful in our conversations with offices on the Hill.
Thank you again for your support. Please let us know if you have any questions or need any additional information and thank you for continuing to make this important argument on behalf of the association and tax-exempt community.