Nonprofit Parking Tax Repealed Thanks To Nonprofit Action!

Guest Article By CalNonprofits: Update On Nonprofit Employee Transportation Benefits

There’s some great news for nonprofits in the spending bill passed and signed Friday, December 20: the tax on nonprofit employee transportation benefits, written into federal law in 2017, was repealed.

This is a major victory for the nonprofit sector and a testament to what we can accomplish when the nonprofit community works together and reaches out to allies.

This illogical and harmful tax forced nonprofits to pay a 21% tax on employee benefits: yes, a tax on expenses. If a nonprofit paid for transit passes or employee parking – even on property they owned – they had to pay 21% of that amount in taxes. CalNonprofits members told us that some were forced to discontinue transportation benefits, and others paid tens of thousands of dollars in unnecessary taxes, and in additional accounting and audit costs.

The new law repeals the tax retroactively. Nonprofits that paid the benefits-related unrelated business income tax (UBIT) for tax year 2018 will be entitled to a refund of the taxes paid, but not the administrative and accounting expenses incurred in calculating it. While filing amended tax returns is the normal way to claim refunds, the IRS may be convinced to develop an alternative or streamlined approach in the near future. Stay tuned.

The parking tax repeal passed in Congress with bipartisan support. And we want to say a special thank you to California members of Congress!

California nonprofits and houses of worship joined with colleagues across the country to make Congress see the light. We can all be proud and happy that we succeeded.

– Article by CalNonprofits

About CalNonprofits

The California Association of Nonprofits (CalNonprofits) is a statewide alliance of more than 10,000 nonprofits that serves as the voice of the nonprofit community to government, funders, and the public at large. Programs you may be interested in:

• Nonprofit Student Debt Project
• Nonprofit Overhead Project
• “Nonprofit-compliance-checklist” target=”_blank” rel=”noopener noreferrer”>Compliance Checklist for California Nonprofits
• Legislation tracker: shows bills CalNonprofits is following with support/oppose letters if available
• GrantAdvisor: a “yelp” for foundations

Dozens of discounts are available to CalNonprofits members, such as to Office Depot, rental cars, hotels, background checks, HR resources, and more.

Join the CalNonprofits mailing list here to learn about events and campaigns.

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