As the clock ticks ever closer to the end of the year, legislators are negotiating final details of a possible tax bill or year-end package. While these negotiations could go in many different directions, it is absolutely critical that Congress repeal the tax that nonprofit organizations must pay for providing transportation benefits to their employees.
With the passage of the 2017 tax law, an unrelated business income tax (UBIT) on the transportation and fringe benefits that nonprofits offer to their employees was enacted. Section 512(a)(7) of the tax code requires nonprofit organizations to pay UBIT on the cost of any transportation fringe benefits that they provide to their employees, such as parking or transit benefits. For over 60 years, UBIT has been a tax on certain income brought in by charities. Applying UBIT to an expenditure, like transportation benefits, is a gross misapplication of the law’s purpose.
Please take one minute to contact your legislators today and urge them to repeal the nonprofit transit and parking tax.
Research confirms that this ill-advised tax currently diverts an average of $12,000 away from each nonprofit’s mission, with a disproportionate impact on smaller organizations. Independent Sector, our members, and partners in the UBIT coalition have advocated vigorously on Capitol Hill, but your Representatives and Senators must hear from you directly about the urgent need to repeal this unfair tax on nonprofits.
