Policy Alert: Nonprofit Transportation Tax

Under the 2017 Tax Cuts and Jobs Act, nonprofits are now required to pay a 21% federal tax on the cost of employee transportation benefits, including transit and parking. Last Friday, Speaker Pelosi stated that House Democrats are slowing the review of the tax law, which could mean that nonprofits and houses of worship providing parking (free and otherwise) and covering transit costs for employees will need to make tax payments as soon as next month. To better understand the impact of these taxes, check out this free report created by Independent Sector in partnership with researchers at the Urban Institute and George Washington University.

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Bills in the 116th Congress, HR 1223 by House Majority Whip Clyburn (D-SC) and HR 513 by Representative Conaway (R-TX), would repeal the transportation tax for nonprofit organizations. A bipartisan bill, "Lessen Impediments From Taxes for Charities Act" or the "LIFT for Charities Act" (S.632) was introduced in the Senate by Senators Lankford (R-OK) and Coons (D-DE). Read this news release for more information.
 
Please join the Idaho Nonprofit Center, PANO, the National Council of Nonprofits, and thousands of organizations around the nation in letting your legislators know the impact this tax is causing. You can do any or all of the following:
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1. Call your Representative at 202-225-3121 and tell them the transportation tax on nonprofits is burdensome and should be repealed. Tell them that nonprofits - charitable organizations, houses of worship, and foundations - are united in opposition to this tax, and urge them to let their leadership know that repealing the nonsensible income tax on expenses by tax-exempt nonprofits is essential before tax payments come due this spring.
   
   
2. Call your Senators at 202-225-3121 and ask them to co-sponsor S.632 (see above). Most Senators won't know about the new bill or few will know that nonprofits must soon (probably by April 15) divert resources away from mission to make quarterly estimated payments on the transportation unrelated business income tax. 
   
   
3. Email your Representative and Senators using their contact forms (on the homepages of their websites) and deliver the same message - the nonsensible income tax on nonprofit expenses by tax-exempt nonprofits for providing transportation benefits should be repealed.
   
   
4. Tweet your Representative and Senator to deliver this simple message: "[Representative's/Senator's Twitter Handle] Please repeal the #nonprofit transportation tax (Code Sec 512a7). Every dollar spent on this tax is a dollar diverted from our mission of serving constituents in our state."

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Excerpts from the Pennsylvania Association of Nonprofit Organizations (PANO)

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