WASHINGTON, D.C., Dec. 17, 2019—Lawmakers in the U.S. House of Representatives unveiled an appropriations package today that includes a repeal of the troubling tax on all nonprofits, including churches, found in Section 512(a)(7) of the Internal Revenue Code.
Russell Moore, president of the Ethics & Religious Liberty Commission of the Southern Baptist Convention, commented on this welcomed relief for churches and nonprofit organizations throughout the country.
“It's not every day that Congress finds bipartisan areas of agreement. Thankfully, the House did just that, repealing the parking lot tax on nonprofits and houses of worship in their appropriations bill. This is essential progress in the right direction for an issue with bipartisan and bicameral support. Now it's time for the Senate to finish the task and end this troublesome tax. Churches must not be seen as untapped sources of government revenue. I am grateful for the House leadership and the members who worked hard for this tax to be repealed and look forward to this burden being lifted from nonprofits around the country.”
This tax was created by a little-noticed provision in the Tax Cuts and Jobs Act of 2017 and requires nonprofit organizations and houses of worship to pay taxes on the cost of their parking lots and transit benefits provided to employees. If left in the code, this small provision would extract $1.7 billion from the charitable sector over the next decade.
The momentum to repeal Section 512(a)(7) is both bipartisan and bicameral. Legislation on this provision passed the House in December 2018 and the Committee on Ways & Means in June 2019. As of today, this repeal is included in the text of the House Appropriations package. The appropriations package now moves to the Senate where the ERLC is joined with the UBIT coalition in advocating for final repeal.