Tax-exempt groups including orchestras face 21 percent tax on employee benefits

Posted on: June 26, 2018

“Republicans have quietly imposed a new tax on churches, synagogues and other nonprofits, a little-noticed and surprising change that could cost some groups tens of thousands of dollars,” writes Brian Faler on Tuesday’s (6/26) “Their recent tax-code rewrite requires churches, hospitals, colleges, orchestras and other historically tax-exempt organizations to begin paying a 21 percent tax on some types of fringe benefits they provide their employees.… Many organizations are stunned to learn of the tax—part of a broader Republican effort to strip the code of tax breaks for employee benefits like parking and meals—and say it will be a significant financial and administrative burden.… The main benefits affected are transportation-related, like free parking in a lot or a garage and subway and bus passes.… Churches and other groups want to know how they are supposed to go about calculating the value of things like parking spaces for employees…. Orchestras want to know how to treat musicians who may perform in different locations. ‘At what point is something a travel reimbursement? And at what point is it a commuter benefit?’ said Heather Noonan, vice president for advocacy at the League of American Orchestras.” Click here to read the Request for Immediate Guidance and Implementation Delay regarding the tax that the League submitted to the Department of the Treasury earlier this month.

Posted June 26, 2018