Churches, synagogues, and other nonprofits are subject to a new 21 percent tax on some types of employee benefits (like parking, transit passes, and gym memberships) under the GOP tax reform plan, and for many — including religious leaders and lawmakers who passed the bill — the change has gone unnoticed for months.
Now that word is getting out, some 600 nonprofit and religious groups have signed a petition asking for its repeal, and Rep. Michael Conaway (R-Texas) has already introduced legislation to that end.
In theory, the tax took effect in January and should be paid quarterly, but the IRS has yet to release detailed guidelines for its interpretation, and the institutions affected are unsure of how to proceed. For example, does the garage at a parsonage count as a parking benefit? Or if a university runs buses around campus, is that a taxable transit cost? For smaller organizations and congregations in particular, compliance may be difficult.
"A lot of people are just finding out about [the tax]," said Steven Woolf, the Jewish Federations of North America's senior tax policy counsel, "and the more people find out about it, the more pressure there will be on Treasury and Congress to either delay implementation or consider changing this." Bonnie Kristian