05/09/2019

New Legislation Aims to Repeal UBIT on Fringe Benefits

It would repeal taxes on nonprofit fringe benefit offerings

On May 2, Senators Ted Cruz (R-TX) and Jeanne Shaheen (D-NH) introduced the bipartisan Preserve Charities and Houses of Worship Act to repeal taxes on nonprofit fringe benefit offerings. This legislation, which accompanies a previously introduced bill in the U.S. House of Representatives, would also rescind the requirement that organizations report their unrelated businesses or trades separately.

According to a statement from Shaheen, “places of worship and charities shouldn’t bear the burden of a mistake in the 2017 tax bill, which is precisely why this common-sense legislation to right that wrong is urgently needed. This bipartisan bill would help nonprofit organizations and faith groups dedicate more of their limited resources to their missions of service for our communities, rather than calculating and paying new taxes that should never have been imposed in the first place. I’m glad to partner with Senator Cruz on this effort and I urge members on both sides of the aisle to join us in moving this legislation forward.”

May 15 is tax day for nonprofits that operate on a calendar-year basis. According to the National Council on Nonprofits, many tax-exempt organizations will pay taxes for the first time as a result of these and other new taxes imposed by the Tax Cuts and Jobs Act (TCJA) of 2017.

Via our relationship with the American Society of Association Executives (ASAE), OSAE is closely monitoring this and related legislation.

This article was provided to OSAE by the Power of A and ASAE's Inroads.