GOP Tax Reform Hitting Churches and Other Non-Profits

Nonprofit groups across the country are pushing back against a portion of last year's tax reform bill that could force some organizations to pay taxes for the very first time.

The new measure in the nation's tax code imposes a 21-percent tax on the cost of some fringe benefits nonprofits provide to their employees, such as parking and commuter passes.

"It sounds absurd, but it wouldn't be the first absurd thing to come along," said Reverend Bob Sweeney, Executive Director of Dallas Life.

The downtown shelter has more than 35 spots for employees, which Sweeney only recently learned could soon be taxable.

A petition calling for the repeal of the provision has already garnered more than 1,500 signatures.

"We wanted to get involved and say, 'No, it doesn't seem fair that our employees, in their parking here, that it would cost a tax,'" Sweeney said. "My greater concern would be for the very small nonprofits, that this could make or break their budget."

Supporters of the provision said it levels the playing field between for-profit organizations and nonprofits.

For instance, taxable employers can no longer claim the deduction on providing certain parking benefits to their employees.

"Anytime you bring down a tax rate something has to go up," said Elaine Sommerville, a certified public accountant and tax professional.

Sommerville said the government needs to clarify how much free parking amounts to a taxable benefit, and whether the location of the parking should be considered.

"We don't know how far it's going to extend. Parking costs a lot in downtown Dallas, so when I get free parking in downtown Dallas I have a benefit," she said.

The new law has left some of Sommerville's nonprofit clients confused about how much they could be forced to pay.

"We have this middle ground. [If] we own our own building and we provide parking in an area where parking is valuable, what do we do with that?" she asked rhetorically.

The answer is up to the IRS and Treasury Department, unless congress acts first.

Reverend Sweeney said all nonprofits like Dallas Life can do is keep an eye on their budget and keep pushing congress to change the law.

"It makes you wonder what areas or square-footage...inside the building could become taxable as these type of issues continue to get bigger."

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