UBIT/UBTI Repeal Gains Further Traction with Even More Bills Introduced

ANCOR is sharing this article by ASAE, of which we are a member, because the change in the formula for the Unrelated Business Income Tax (UBIT, also known as Unrelated Business Taxable Income, UBTI) is affecting non-profit providers of disability supports in their function as employers. Specifically, the 21 percent tax on fringe benefits such as transportation and parking would create many implementation challenges, not the least of which is exacerbating the workforce crisis for frontline staff for these supports. ANCOR is closely following this issue, including a separate bill introduced by U.S. Representative James Clyburn (D-SC).

As shared by ASAE:

“Reps. Mark Walker (R-NC) and Tom Suozzi (D-NY) introduced a bill March 5 to repeal the unrelated business income tax on certain employee benefits provided by associations and other tax-exempt organizations.

The bill is a companion to legislation introduced last week by Sens. James Lankford (R-OK) and Chris Coons (D-DE).

The tax on nonprofit fringe benefits, like parking and mass transit assistance, was implemented as part of the 2017 Tax Cuts and Jobs Act. The tax is proving to be a huge burden for the nonprofit community, including churches and small charities that have little or no experience dealing with the IRS and insufficient guidance on how to calculate the value of parking and other benefits provided to their employees. ASAE and the UBIT Coalition have been advocating for repealing the tax for more than a year.”