ASAE Sends Excise Tax Comments to Treasury
The organization is urging the Treasury to review a 21-percent excise tax
On Dec. 3, 2018, the American Society of Association Executives (ASAE) sent a letter to the U.S. Treasury Department asking the department to mitigate the impact of a 21 percent excise tax on certain tax-exempt executive compensation, enacted as part of last year’s Tax Cuts and Jobs Act (TCJA).
As ASAE explained in a Dec. 4 letter to members, the tax might appear to affect only a select number of tax-exempt entities with highly compensated employees, but it actually threatens to affect a much broader segment of the tax-exempt sector. This is because compensation subject to the new tax includes not only base salary, but also the cash value of most benefits, including those that have vested but haven’t been received, retirement benefits, and certain retention payments contingent upon service.
“Unless Treasury acts to limit the exposure of tax-exempt organizations subject to this excise tax, many organizations currently unaware of their potential liability could find their reserves and overall fiscal health greatly compromised,” said ASAE President and CEO John Graham, FASAE, CAE, in the member letter.
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