Last year’s Tax Cuts and Jobs Act (TCJA) includes a provision requiring associations, charities, churches and other tax-exempt organizations to pay unrelated business income tax (UBIT) on employee fringe benefits, including parking and transportation.
To date, more than 70 groups have joined ASAE’s UBIT Coalition, which has asked the Treasury Department to delay implementation of this provision until guidance can be issued. The lack of guidance from Treasury has created a lot of confusion and conflicting opinions about how nonprofit organizations should go about calculating their tax liability to comply with the requirement. Many organizations are already making estimated payments to the IRS on this expense – absent any guidance – which further supports ASAE’s request for a delay in implementing this requirement.
The UBIT Coalition has also asked Treasury for a clear de minimus threshold and an exemption for tax-exempt organizations in municipalities like Washington, D.C. and New York City that mandate transportation benefits.
In addition to its work with Treasury, the coalition has had numerous meetings on Capitol Hill to build awareness of the issue and advocate for a legislative fix. There is no cost to join the UBIT Coalition. Organizations that wish to add their name to the coalition can contact Mary Kate Cunningham at firstname.lastname@example.org.
This article was provided to OSAE by the Power of A and ASAE's Inroads.