The 2017 tax bill forces nonprofits, including churches, to pay a 21 percent tax on the value of certain employee benefits.
Short of legislative action, a public relations nightmare could be awaiting lawmakers who voted for the tax bill back home.
“This is an issue that will not go away,” said Dan Busby, president of the Evangelical Council for Fiscal Accountability. “When you stir up 100,000 houses of worship, and then hundreds of thousands of nonprofits on top of that, you have a pretty mighty force that is going to get attention on this issue.”
Tucked away in the new tax law congressional Republicans passed late last year with no Democratic support is a provision slapping certain nonprofits and charities, including churches, with a 21 percent tax on the value of some employee benefits.
The expectation is the tax would relate to parking spaces and public transit passes. But those affected by the provision are genuinely unsure what exactly would qualify as a taxable expense because they still haven’t received official guidance from the Treasury Department.
“Treasury is aware of the change … and we have been talking to the impacted constituencies about the concern,” said a Treasury spokesperson in a statement to McClatchy. “We are working to address the issue and provide clarity for taxpayers.”
The new tax on the value of employee benefits means that many institutions are going to have to prepare tax forms for the very first time — a convoluted and potentially costly exercise.