11/16/2017

Royalties Still Targeted in Revised Senate Tax Bill

This provision would tax royalty income derived from the licensing of an organization's name or logo

Senate Finance Chairman Orrin Hatch (R-UT) rolled out the revised version of his chamber's tax plan late on Tuesday night and there were some pretty extensive changes to the bill, including removal of the proposal to eliminate nonqualified deferred compensation arrangements for nonprofit employers like associations.

The Ohio Society of Association Executives (OSAE), The American Society of Association Executives (ASAE) and many other groups had made the case that eliminating these deferred compensation plans would hurt nonprofit employees who in good faith entered into contractual agreements with their employers, and are counting on this benefit as part of their retirement planning and would hurt nonprofit employers in attracting and retaining top talent. While we are pleased that this provision has been removed from the Senate bill and the House bill, as well, we will need to stay vigilant as the tax bill advances to ensure it doesn't resurface. 

Also, of immediate concern, as the Senate Finance Committee continues its markup this week, is a provision that still exists in the Senate bill to tax royalty income derived from the licensing of an organization's name or logo.

Yesterday, ASAE sent this letter on the royalty income provision to Hatch and other committee members. If your organization wants to send its own letter on this issue to Hatch and other Senate Finance Committee members, ASAE is permitting your organization to use any portion of ASAE's letter as a model.

Also, if you have a relationship with any Republican senator serving on the Senate Finance Committee whom you can approach about this issue, please contact ASAE's Public Policy team at (202) 626-2703 or email ASAE at publicpolicy@asaecenter.org.

Thank you for your assistance as always and we will keep you informed as this bill process continues this week.