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Take the Survey
Congress Needs to Know Now
What Is Your Experience with the Tax on Nonprofit Transportation Benefits?
During a congressional hearing this Wednesday (see article below), lawmakers will listen to the concerns of nonprofits about the new 21-percent tax on nonprofit transportation benefits, such as parking and transit passes. You can help make sure Representatives learn from real-world examples the harm the law is causing. Please complete this quick survey asking how much your nonprofit paid in taxes, what it cost your nonprofit to calculate the tax liability, and how that money could have been better spent advancing your mission in your communities. Help repeal this unfair tax by sharing data that will make the case and prove that nonprofit assets are better spent on mission than on taxes. Take the Survey!
Congressional Hearing to Consider Repeal of Tax on Tax Exempts
The Oversight Subcommittee of the House Ways and Means Committee is scheduled to conduct a hearing focused exclusively on the need to repeal the new tax on nonprofit transportation benefits. Entitled “Ending the TCJA Tax on Houses of Worship, Charities, and Nonprofits,” the witnesses invited to testify are expected to identify the challenges the tax is imposing on nonprofits, ranging from faith-based organizations and higher education to human services providers and trade associations. Through written and oral testimony, the National Council of Nonprofits plans to share results of the nonprofit survey (discussed above). The testimony will demonstrate to the Members of the Subcommittee why they need to repeal the tax and why they must act now to ensure that no more dollars are diverted from missions to pay this unfair tax. The hearing will convene on Wednesday, June 19 at 2:30 pm Eastern and can be viewed here.
Nonprofit Relief Act To Be Introduced This Week
Congresswoman Carolyn B. Maloney (D-NY) plans to introduce the Nonprofit Relief Act this week to address new and longstanding tax law policies that adversely affect the ability of charitable nonprofits to advance their missions. The legislation would repeal the new tax that requires nonprofits to treat every unrelated business revenue stream as a separate “trade or business” that may not be aggregated with other profits and losses to reduce tax liabilities. The bill also seeks to extend the paid leave tax credit to tax-exempt organizations, thus fixing an oversight in the 2017 federal tax law, and change the tax treatment of mileage reimbursements by nonprofits to volunteers so they are no longer subject to federal and state income taxation.
Nonprofits Propose Disaster Relief and Recovery Tax Recommendations
Last week, the state association members of the National Council of Nonprofits submitted recommendations to the Senate Finance Committee taskforce on disaster tax relief. The letter recommended four specific changes to federal tax laws to assist nonprofits engaging in disaster relief and recovery activities. Most notable among the proposals is a call to create a temporary, targeted universal or non-itemizer charitable deduction to provide a giving incentive to people throughout the country, regardless of tax-filing status. The letter explained, “Combined, the four common-sense recommendations will eliminate uncertainty and remove barriers to nonprofit success in helping our fellow residents rebuild their lives and assisting our communities to come together to develop local solutions.” The Disaster Tax Relief Taskforce welcomes suggestions from other nonprofits and asks that organizations submit comments by email to as soon as possible to aid it in gathering ideas for what a permanent law should say about disaster tax relief.
Federal FastView
- Curbing State Tax Credit Programs: The U.S. Treasury and Internal Revenue Service released the final rule restricting the federal tax benefits of state and local tax credit programs. The regulation limits the amount that individual taxpayers can deduct from their federal taxes for charitable donations incentivized by certain state and local tax credit programs. The new regulation also offers a safe harbor provision for individuals who claim the value of the tax credit as an itemized deduction for the state and local taxes (SALT) they paid, up to the $10,000 SALT cap. Read the National Council of Nonprofits analysis and the June 12 Special Edition of Nonprofit Advocacy Matters.
- Redefining Poverty: Comments are due this week on a draft proposal to redefine the poverty line by adjusting the metrics used to set the Official Poverty Measure that determines eligibility for a variety of federal benefits programs, including the Supplemental Nutrition Assistance Program (SNAP or food stamps), Head Start, and Medicaid. The federal Office of Management and Budget (OMB) is seeking input on which of various consumer price indexes should be used to make annual inflation adjustments to the poverty line. A lower inflation adjustment would mean that the poverty line would rise more slowly, likely reducing the number of people who would qualify for federal assistance programs. OMB is seeking public comments by June 21.
- Estimating Charitable Giving Incentives: The Indiana University Lilly Family School of Philanthropy conducted research and released a report, Charitable Giving and Tax Incentives, analyzing the potential impact of five distinct federal policy ideas meant to increase charitable giving. The potential approaches included caps and floors on giving and tax credits. The report, commissioned by Independent Sector, found that the proposals could increase donations to nonprofits by between $17.4 billion and $36.9 billion per year.
States Cancelling Taxes on Tax Exempts
Hawai`i Governor Ige signed a bill into law last week that decouples the state’s unrelated business income tax from federal tax law, saving nonprofit organizations from being taxed at the state level as well for providing transit and parking benefits. The Aloha State joins Minnesota, New York, and North Carolina in removing the unrelated business income tax on nonprofit expenses. Nonprofits in Illinois are still waiting for Governor Pritzker to sign its decoupling bill the Legislature sent him last month. Additionally, recently introduced legislation in New Jersey would exempt charitable nonprofit employers from a state law enacted earlier this year that will require employers of 20 or more employees to offer pre-tax transportation fringe benefits to their employees. A major critique of the federal tax on nonprofit transportation benefits is that the 21-percent tax applies to these mandated benefits. The New Jersey bill seeks to prevent charitable organizations in the Garden State from being subjected to both the mandate to provide such benefits and paying a federal tax on the benefits provided.
Nonprofits Prepare for Possible State Government Shutdown
Policymakers in Alaska are looking at a second special session to finalize the state budget for the year. The first special session adjourned after the Legislature passed a capital budget bill but failed to fund capital projects due to disagreement on how to pay for the projects. Should Governor Dunleavy veto the operating budget, the government will shut down beginning July 1. The Foraker Group, the state association of nonprofits in Alaska, is warning nonprofit leaders to take steps to avoid the adverse effects of a government closure. “For those who have a partnership with government to deliver services in Alaska, this is the time to plan for a shutdown or delay in receiving funds – two possibilities that will have an impact on all of us,” wrote Laurie Wolf, The Foraker Group’s President and CEO. Nonprofits in Connecticut, Minnesota, Pennsylvania, and elsewhere across the country understand the hardships that state government shutdowns cause to their operations, their finances, and the people they serve. The federal government shutdown in December and January “impose[d] unfunded costs on nonprofits, resulting in direct harm and significant collateral damage” to innocent nonprofits, their employees, and the people they serve, according to a statement to the House Small Business Committee from the National Council of Nonprofits in February. The inability of governments to award and execute new grants or contracts to nonprofits, as well as make payments for work under existing grants and contracts, increased both the public’s needs and the work of nonprofits to meet those needs during the federal government shutdown.
Colorado Lawmakers Back Public Service Loan Forgiveness
A new law in Colorado requires state agencies to notify, educate, and promote the benefits of loan forgiveness programs and repayment plans, including Public Service Loan Forgiveness (PSLF), to teachers, public servants, and the public. Beginning in 2020, and annually thereafter, the State “shall develop informational materials” and provide that information to key government departments for distribution to state employees, so they may take advantage of programs that provide borrowers loan forgiveness after making 120 payments under qualifying repayment plans. The information will also be made publicly available online so employees at charitable nonprofits and other public service organizations may also learn about and benefit from the program. Access to public student loan forgiveness can be a key inducement for nonprofit employers to emphasize when recruiting employees to join in advancing their missions of serving the public.
Making Moves on Capitol Hill
Everyone who has ever walked around Capitol Hill knows that there’s movement everywhere. The U.S. Capitol really does sit on top of an actual hill - one that can look like a busy ant hill with perpetual motion as people, thoughts, legislation, and everything else are constantly moving. On June 5, members of the National Council of Nonprofits joined that movement to raise the voices of nonprofits from throughout the country for the work they do in their communities back home.
 Representative Maloney (D-NY) kicked off our Advocacy Day by discussing the soon-to-be-introduced Nonprofit Relief Act and desire to partner with the nonprofit community to force changes in Congress and elsewhere to create a better policy environment so nonprofits can focus more on missions and less on taxes. See the article above for specifics on the legislation. Then, representatives from the state associations in our network headed off to meet with nearly 100 House and Senate offices to advocate for co-sponsorship of the Nonprofit Relief Act, repeal of the tax on nonprofit transportation benefits, full funding for the 2020 Census, and expanding charitable giving incentives.
 Having so many people on the Hill showcases not just the great work of nonprofits across the country, but also how we are all connected to one another and dedicated to leading movements in our communities. Branden Haralson of Nonprofit Connect, which works with Kansas and Missouri nonprofits in the Kansas City area, stated it best: “The greatest highlight of Nonprofit Lobby Day was the opportunity to build relationships with other nonprofit associations… who are working in other parts of the country to help their members affect change. Though our geography may be different, the struggles and successes of our organizations and our members’ organizations are shared by a common theme of striving for the greatest good for the greatest amount of people. We work every day to help our members achieve their missions through education, resources and community-building, and we advocate on behalf of our members and their missions to the elected officials who can either lift them up or stand in their way.”
Read more examples of Advocacy in Action,
a regular feature of Nonprofit Advocacy Matters.
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