By Aaron Earls
Church parking lots will no longer mean tax headaches for churches if a recent spending bill becomes law.
On Dec. 17, the House of Representatives voted 297-120 in favor of a spending bill that includes a rescinding of Section 512(a)(7) of the Tax Cuts and Jobs Act of 2017 that requires churches and other nonprofits to pay a 21% tax on employee benefits like parking spaces.
“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” said Russell Moore of the Ethics and Religious Liberty Commission, which lobbied against the tax.
The appropriations package now moves to the U.S. Senate where Moore is hopeful for a similar result.
“Churches must not be seen as untapped sources of government revenue,” he said. “I am grateful for the House leadership and the members who worked hard for this tax to be repealed and look forward to this burden being lifted from nonprofits around the country.”
According to The Non Profit Times, House and Senate negotiators agreed on a bipartisan tax bill that would retroactively repeal the tax threatening nonprofits.
David Thompson, vice president of policy for the National Council of Nonprofits, said that if the final bill passed is retroactive the organizations that have paid the tax will be able to get that money back.
Opponents of the tax said it would cost nonprofits and churches an estimated $1.7 billion in the next decade.
After the Tax Cuts and Jobs Act of 2017 was passed, the provision including the taxing of church parking lots sparked significant confusion and consternation.
In an effort to clear up exactly who would be required to pay the taxes, the Treasury Department released a 24-page document that did little to shed light on the issue.
Several ministries and organizations attempted to provide guides and questions to help churches decide if their parking lot had become a tax liability.
Sen. James Lankford (R-Okla.), who cosponsored a bill in the Senate with Sen. Chris Coons (D-Del.) to remove the tax, said several legislators had been working for months to remove the parking lot tax.
“Most nonprofits were neither equipped to handle the additional administrative burdens or compliance costs, nor intended to be a source of revenue for the federal government,” said Lankford.
“I believe that we have a moral obligation to support our neighbors most in need, and nonprofits play an essential role in doing just that,” said Coons.
“The passage of this bill will help to ensure that America’s charitable nonprofits and houses of worship are able to continue providing critical services to communities without undue burden.”
If Lankford and Coons lead the Senate in following suit churches won’t have to spend Christmas counting parking spots and calculating taxable benefits.
