The House passed a year-end bipartisan spending and tax package Dec. 17 that includes a provision to repeal the 21% unrelated business income tax (UBIT) on transportation fringe benefits levied on nonprofit organizations.
The Senate will vote on the bill this week and President Trump is expected to sign it to avert a partial government shutdown at midnight on Dec. 20. ASAE and the UBIT Coalition made a concerted push to have UBIT repeal included in the year-end spending deal. The nonprofit fringe benefits tax was created as part of the 2017 Tax Cuts and Jobs Act and repealing it has been ASAE’s top legislative priority for two years.
“The ASAE community not only mobilized quickly after this misguided tax was passed as part of the 2017 tax law, but sustained a years-long advocacy and grassroots campaign to educate lawmakers about how this tax unfairly expanded the UBIT statute to tax basic parking and transit benefits that nonprofits provide to their employees,” said Susan Robertson, CAE, ASAE’s interim president and CEO. “ASAE thanks its members and the UBIT Coalition for persistently and convincingly making the case that this tax should be repealed to allow associations and other nonprofit organizations to focus their limited resources on mission-oriented programs and services that benefit society.”
ASAE and the UBIT Coalition wish to thank the many advocates who wrote letters and visited congressional offices in support of UBIT repeal, as well as the legislators on both sides of the aisle who understood the compliance challenges and administrative burdens that the employee fringe benefits tax created for nonprofit groups.
Once the bill is enacted, repeal of the fringe benefits tax will be retroactive for taxes that nonprofits have paid or accrued after Dec. 31, 2017.