10/18/2024

ASAE Submits Tax Policy Comments to Ways and Means

TCJA tax cuts are expiring, and nonprofits' tax-exempt status could be threatened

The American Society of Association Executives (ASAE) submitted comments this week to House Ways and Means Tax Teams formed by House Ways and Means Committee Chairman Jason Smith (R-MO) to study key tax policy changes that would help families, workers and small businesses.

Why it matters: With sweeping tax breaks established in the 2017 Tax Cuts and Jobs Act (TCJA) set to expire in 2025, major tax changes are undoubtedly on Congress’s agenda next year. ASAE’s comments are focused on preserving the current tax treatment of association revenue streams.

Congressional leaders on both sides of the aisle have called for next year’s tax package to be fully funded at a cost of $3-4 trillion.

• Some legislators and policy think tanks have called for taxing all tax-exempt organizations across the board, applying the 21 percent corporate tax rate to all non-donation net revenue.
• Membership dues, sponsorships, investment income and educational program revenue are only a few examples of what is potentially at risk.

This week, ASAE warned congressional tax writers that new taxes on associations would have grave consequences for the sector.

What they're saying: “Any alteration of the tax-exempt status of nonprofit associations could disrupt the critical work of these organizations, diverting valuable resources away from mission-focused activities and forcing associations to reduce services that benefit the industries, professions, and communities they serve,” ASAE President and CEO Michelle Mason, FASAE, CAE, said in the Ways and Means comments.

• “For example, a medical association providing free clinics to veterans, an engineering association providing response after a natural disaster or an education association ensuring kids and families in need have access to food and school supplies would have to reduce or in some case eliminate additional community benefits. Thousands of associations go above and beyond their everyday missions, positively impacting society.
• Impeding their work with burdensome new taxes would have a cascading negative effect on them and the millions of members who rely on them.”

In separate comments to the Ways and Means Tax teams, ASAE addressed the impact of potential taxation on associations’ critical role in workforce development and skills training.

• As the committee looks to tax changes next year, ASAE urged legislators to prioritize passing the Freedom to Invest in Tomorrow’s Workforce Act, and to consider the role that trade and professional associations play in training the workforce.

The bill passed the Ways and Means Committee earlier this year but has not yet been put to a floor vote in the House.

This article was provided to OSAP by ASAE's Power of Associations and Inroads.