The Tax Cuts and Jobs Act of 2017 (TCJA) created a new tax on the transportation and parking benefits provided to by nonprofit employers to their employees. All nonprofit organizations, including colleges and universities, are now be taxed at the corporate tax rate (21 percent), on the value of transportation and parking benefits provided to employees (under Section 512(a)(7) of the tax code).
Amid growing concerns raised by the nonprofit sector about the tax’s detrimental impact on public service missions, and increasing lawmaker support for its repeal, House Ways and Means Oversight Subcommittee Chairman John Lewis announced that the subcommittee would hold a hearing focused on addressing the parking tax, entitled “Ending the TCJA Tax on Houses of Worship, Charities, and Nonprofits.”
Originally scheduled for June 19, the hearing was ultimately cancelled due to scheduling conflicts with appropriations bill-related votes slated to come to the House floor on the same day. Following its cancellation, Hill staff indicated that they hoped to reschedule the hearing to take place before the August congressional recess.
Emory University and several other associations representing nonprofit groups were scheduled to testify at the cancelled hearing. The groups sent a letter to Ways and Means Committee Chairman Rich Neal (D-MA) that provided links to the written testimony each had prepared in advance of the hearing.
Neal shortly thereafter added a parking tax repeal provision to his newly introduced bill, the Economic Mobility Act of 2019, that would be retroactive to the TCJA’s date of enactment. This bill, along with several other tax-extender pieces of legislation, was marked up and passed along party lines by the full House Ways and Means Committee on June 20. The bill is technically now awaiting floor time to be passed by the full House of Representatives, although Neal has stated he may hold the bill from a full floor vote until negotiations on other tax legislation are under way. Unfortunately, the legislation is not anticipated to pass as currently written in the Republican-controlled Senate where concerns about its cost remain at the top of Republican lawmakers’ minds.
In light of the significant economic impacts this tax has on colleges and universities around the country, NACUBO is committed to engaging in proactive advocacy to support its repeal. With this in mind, we’ve launched an interactive advocacy campaign that makes it easy for individuals and organizations to connect with their lawmakers via email or Twitter and express support for repeal of the tax.
Simply text “UBIT” to 52886 to receive a link to engage with the campaign on your phone. You can also use this link to access the campaign on desktops or mobile devices.
Even if individuals or organizations choose not to engage directly with NACUBO’s campaign, we encourage all to send a tweet to their legislators with the campaign hashtag #parktheparkingtax to express support for a parking tax repeal.