Capitol Correspondence - 02.15.19

Bill Repealing 2017 Tax on Fringe Benefits (UBIT) Introduced

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ANCOR is sharing this article by ASAE, of which we are a member, because most of our members lead non-profit organizations and as such are affected by these provisions. We have been following this issue since the 2017 tax reform package became law.

As shared by ASAE:

“House Majority Whip James Clyburn (D-SC) introduced a bill today to repeal a 21 percent tax on the value of so-called fringe benefits – such as free parking or mass transit assistance – that nonprofits provide to employees.

ASAE and the UBIT Coalition have had numerous meetings on Capitol Hill this year urging lawmakers to repeal the fringe benefits tax, which projects as a huge burden for associations and other nonprofit groups.

At a press conference today, Clyburn pointed out the impact of this tax on smaller charities and churches, who may be unfamiliar with how to calculate the value of parking and transportation benefits for their employees. “Most of these organizations have little or no experience dealing with the IRS, let alone a clear understanding of what is covered by the new tax law and how to calculate its value,” Clyburn said.

Clyburn said his bill is fully paid for by a .03 percent increase in the corporate tax rate. Sen. Sherrod Brown (D-OH) is expected to introduce a companion bill in the Senate. Rep. Mike Conaway (R-TX) has also introduced a bill this year to repeal the fringe benefits tax and Sen. James Lankford (R-OK), who is a new member of the Senate Finance Committee, is also on record in favor of UBIT repeal.

‘Bipartisan support is growing to repeal this onerous tax on nonprofit employee benefits,’ said ASAE President and CEO John Graham, FASAE, CAE. ‘These new tax liabilities create numerous compliance challenges for nonprofits and threaten the financial security and missions of organizations that provide countless services to communities in need and to society as a whole.’”