Treasury Issues ‘Parking Tax’ Guidance

The U.S. Treasury Department released a guidance document on Monday intended to help churches and nonprofit ministries compute and comply with a new looming “parking tax.” It also issued a notice to provide relief to charities that have not yet been paying estimated taxes on any such obligations.

A senior Treasury official told the Wall Street Journal that the department couldn’t unilaterally delay or repeal the tax, which was a surprise provision in the tax reform package approved by Congress last year. However, the department’s release indicated it was sensitive to charities’ concerns.

Treasury Secretary Steven Mnuchin said, “The guidance issued today aims to provide flexibility while minimizing the burden on nonprofit groups that provide employee parking.”

Senators James Lankford (R-Okla.) and Chris Coons (D-Del.) recently called on the Treasury Department to delay enforcement of this new parking tax for at least a year given confusion around its implementation. In a tweet this week, Coons criticized this week’s “minimal instruction” and said, “That’s not enough.”

In a post providing initial analysis of the new rules, the Evangelical Council for Financial Accountability (ECFA) similarly commented that Treasury’s new rules “confirm that this tax brings unnecessary complexity and cost to nonprofits serving charitable purposes.” ECFA is continuing its call for Congress to repeal the parking tax – a call NRB has joined.

During a recent interview on CBN News’ Faith Nation, Dr. Jerry A. Johnson, president & CEO of NRB, lamented that congressional leaders had overlooked the impact of this provision last year and said, “We should not be dealing with this now in the 11th hour of this Congress.” Even so, Congress is right now reviewing it, so Johnson urged viewers to contact their senators and representatives to tell them to fix this problem.

Significantly, after advocacy by NRB and others, the House of Representatives added a full repeal of the parking tax in its new tax reform bill currently under consideration. Other new additions to that bill this week by House Ways and Means Committee Chairman Kevin Brady (R-Texas) are a Free Speech Fairness Act-like provision to fix the burdensome Johnson Amendment and an expansion of 529 education savings accounts to homeschoolers and, in what would be a first-time recognition in the tax code, unborn children.

Unfortunately, if the House musters the votes to pass this bill before the end of the session, it is unlikely to be taken up as it is in the Senate where Democrat cooperation would be needed. Indeed, Sen. Ron Wyden (D-Ore.), top Democrat on the Finance Committee, dismissed the House bill’s seriousness with its “ideological trophies.” Nevertheless, in addition to establishing a voting record, its provisions could also influence negotiations on a final end-of-year government funding package.

By Aaron Mercer, Vice President of Government Relations

Published: December 14, 2018

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