11/10/2017

ASAE Urges Associations to Take Action on Tax Bill Targeting Organizations

Three specific provisions are expected to impact many associations, tax-exempt entities

On Thursday, Nov. 9, 2017, the association community had a major win when provisions that would negatively impact the association community were removed from the House tax bill.  

Late Thursday evening, however, the Senate released a bill that includes some of the same provisions we fought in the House bill along with several new proposals that the American Society of Association Executives (ASAE) strongly believes would have negative repercussions for associations.  

The draft bill is hundreds of pages long, and ASAE is still sifting through the various provisions but an initial read shows three specific provisions that will impact many associations and tax-exempt entities, including:

• Eliminating non-qualified deferred compensation arrangements for nonprofit employers like associations;
• Applying intermediate sanctions rules to 501(c)(5) and (c)(6) organizations and eliminating the safe harbor for nonprofit organizations that exercise due diligence in determining compensation (We are concerned this would put too much power in the hands of the IRS to determine what is reasonable and fair compensation); and
• Subjecting royalty income derived from the licensing of a nonprofit's name or logo to unrelated business income tax (UBIT).

ASAE has drafted a sign-on letter on this issue that it will share with the Senate Finance Committee immediately. It is vital that we act quickly to communicate with Senate tax-writers before they begin their markup on Monday, Nov. 13, 2017. If your organization is concerned about any of these provisions, add your organization's name to the letter by Sunday, November 12 at 5 pm EST. 

Finally, we urge you to share this message with your colleagues and any contact you may have in Congress, and especially the Senate Finance Committee. To view a list of members of the Finance Committee, click here.