Negotiations over a tax package that passed the House Ways and Means Committee last week are likely to draw out over the summer as lawmakers debate whether and how to offset the cost of various provisions.
The Ways and Means Committee last week advanced four tax bills, including a measure to repeal the 21 percent tax on the value of so-called fringe benefits, such as free parking and mass transit assistance, that nonprofit employers offer or are required to provide to employees. ASAE and its UBIT Coalition have been advocating for repeal of this tax since it was enacted as part of the 2017 Tax Cuts and Jobs Act.
Repealing the tax has bipartisan support but House Democrats included UBIT repeal in a tax bill that also expands the Earned Income Tax Credit and makes the Child Tax Credit fully refundable.
All of the tax bills passed out of the Ways and Means Committee last week with just Democratic support, and Democrats’ insistence so far on finding a way to pay for tax extenders by raising taxes elsewhere is a non-starter for Republicans. The tax extenders bill is offset by ending higher exemption levels for the estate tax at the end of 2022 instead of 2025 as currently scheduled, and that is unlikely to win support from Senate Republicans should it pass the House.
For now, no timeline has been set on when the tax bills could see a vote by the full House of Representatives and it’s possible that negotiations with Senate Republicans stretch past the August recess.
ASAE encourages association advocates to continue to press their elected officials to repeal the tax on nonprofit fringe benefits this session. For questions on this issue or assistance in contacting legislators, please contact ASAE’s Jeff Evans at email@example.com.