11/20/2017

ASAE Focuses on Royalties in Senate Tax Bill

New royalty tax income provision would negatively affect many nonprofits

Following four days of debate, the Senate Finance Committee voted Thursday night to approve its version of the Tax Cuts and Jobs Act. The party-line approval clears the way for the full Senate to consider the bill just after Thanksgiving.

As the committee marked up the bill this week, the American Society of Association Executives (ASAE) weighed in on Wednesday with a letter urging committee Chairman Orrin Hatch (R-UT) and congressional tax-writers to remove a provision in the bill that would tax royalty income derived from the licensing of an organization’s name or logo.

“As you continue to modify the tax bill to create more certainty for America’s job creators, we respectfully ask you to remove this provision to tax royalty income that helps associations and other tax-exempt organizations fulfill their exempt purpose, or at the very least, modify the provision to ensure that royalties of a tax-exempt entity will not be taxed when 1) there is insubstantial service offered by the tax-exempt organization in return for the payment, and 2) when income generated from royalty agreements does not comprise greater than 20 percent of an organization’s gross income,” said ASAE President and CEO John H. Graham IV, CAE, in the letter.

Please click here to read the complete article from Associations Now.