Jewish groups seek to minimize tax increase on nonprofits

Providing fringe benefits neither taxable to the employer nor the employee has been a crucial perk that nonprofits, including Jewish synagogues and other institutions, can offer. But the Tax Cuts and Jobs Act of 2017 (TCJA) reversed the rules regarding transportation and parking fringe benefits, and so the Internal Revenue Service issued guidance in an attempt to ease concerns and confusion. Barring the passage of a proposed legislative measure, nonprofits will be subject to a 21 percent tax on such benefits. The tax cost to the nonprofit sector of these changes is estimated to be $1.7 billion over the next decade. Nevertheless, Democrats in both chambers will likely not support a fix that was reintroduced by House Ways and Means Committee chairman Kevin Brady to scrap the provision under the TCJA, which is scheduled to take effect in 2019. “We want those nonprofit organizations to focus on their core missions,” the Texas Republican told reporters on Capitol Hill. “Repealing this allows them the certainty to do that.” While the bill may pass the House right now, were it to get a vote as the end of the congressional calendar nears, its prospects in the Senate remain dim, as all of the upper chamber’s Republicans would need at least eight Democrats to reach the 60-vote threshold to avoid a filibuster. No Democrats voted for what was the biggest tax reform since 1986.