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The Non-profit Parking Tax Has Been Repealed
By: Melisa Beauchamp
Thanks to a bipartisan effort in the U.S. House and Senate, the non-profit parking tax (commonly referred to as the "Church Parking Tax") was repealed. The repeal was included in the $1.4 trillion spending package signed by President Trump on Dec. 20, 2019.
In December of 2017, President Trump signed into law the Tax Cuts and Jobs Act (TCJA) which required tax-exempt entities to pay a 21 percent tax on unrelated business income derived from parking and qualified transportation benefits provided to their employees. The effects of this provision were not known at the time of passage, however during 2019, studies highlighting the effects on the non-profit industry were released. One of the studies released was performed by George Washington University and the Independent Sector. Their research determined 10 percent of non-profit organizations would reevaluate providing qualified transportation benefits to their employees because of the TCJA. The study estimated the average annual cost of the parking tax, on a non-profit organization, to be $12,000. This study and others were crucial in helping achieve bipartisan support for the repeal of this provision.
Members of Congress hope to make non-profit organizations whole by repealing the parking tax retroactively to its inception. This is great news for tax-exempt entities that incurred this tax in 2018. Any tax-exempt entity that paid taxes as a result of the parking tax will be able to seek a refund for the amounts owed. In addition, organizations who changed their parking policies to remove reserved parking spots will now be able to reissue those reserved spots.
If your non-profit entity has any questions about how this repeal will affect your organization, please reach out to Melisa Beauchamp at melisa.beauchamp@aprio.com.
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Melisa Beauchamp
Melisa is the leader of the Non-Profit and Education group at Aprio. She has served clients across the United States in areas of tax compliance, financial reporting, auditing and tax-exempt consulting. She is known for her extensive expertise in private foundations, public charities and other charitable estate planning entities. Melisa's expertise in the tax-exempt industry is unique, as she has experience both as a consultant and as an executive director of an operating private foundation.
To reach Melisa, call (770) 353-8382
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