Time is running short for this Republican-controlled Congress to pass a substantial new tax package, but ASAE is still urging lawmakers to repeal a provision in last year’s tax law that forces nonprofit institutions to pay a 21 percent tax on parking and transportation benefits for their employees.
House Ways and Means Committee Chairman Kevin Brady (R-TX) included a provision repealing the tax on nonprofit “fringe benefits” in his year-end tax bill released last week. ASAE and its UBIT Coalition have been seeking repeal or delay of this tax for almost a year.
In adding the provision to his tax package last week, Brady said he wants to “proactively [eliminate] any potential uncertainty for our churches and community organizations so nothing distracts them from their core mission.”
There is widespread support for repealing this levy on nonprofit parking and transportation benefits, but it’s unclear if there is enough support to pass Brady’s larger tax bill, particularly in the Senate. Some Senate Democrats have expressed little interest in helping Republicans fix a tax law the GOP passed last year without Democratic support. If Brady’s tax bill falters, Congress could seek to pass a smaller number of tax fixes that have bipartisan support.
Sens. James Lankford (R-OK) and Chris Coons (D-DE) last week asked Treasury Secretary Steven Mnuchin for a one-year delay in implementing the fringe benefits tax to give Congress time to fix it.
“Requiring these organizations to pay a federal tax on these employee benefits, something they have never been required to do before, will cause them to not only face an increased operating cost, but also an administrative burden,” Lankford and Coons said in the Nov. 27 letter.
ASAE is encouraging organizations to support this repeal effort by sending this model letter to members of the House and Senate.