Important First Step in Repeal of Nonprofit Parking and Transportation Fringe Benefit Tax

The House Ways and Means Committee recently voted in favor of The Economic Mobility Act of 2019 (H.R. 3300). Section 401 of this bill would repeal the Unrelated Business Income Tax (UBIT) fringe benefits provision Tax Cuts and Jobs Act of 2017. This provision imposed a 21 percent tax on exempt organizations who offer qualified parking transportation fringe benefits to their employees.

While the bill has yet to be passed in the House of Representatives and the Senate, this is a positive first step toward repeal of the tax on parking and transportation assistance that nonprofit employers provide to employees. The provisions of the bill state the repeal will be retroactive, and if passed, those nonprofits that paid tax for 2018 and are making estimated 2019 payments should expect to be remedied for payments made.

Your Whittlesey advisors will be monitoring this legislation as it moves through Congress, and we will continue to provide you with updates. It is also important for your voice to be heard by Congress on this important matter. The National Council of Nonprofits is urging nonprofits to complete a brief survey to let Congress know how much the new tax is costing you and how it impacts your mission and to urge Congress to repeal the law.

If you have any questions or concerns about the UBIT benefits, please contact your Whittlesey Advisor.