12/05/2017

ASAE, Other Organizations Concerned Over Potential Issue in Tax Bill

Deduction of membership dues may be called into question

The American Society of Association Executives (ASAE) Public Policy staff and many of the organization's members, including the Ohio Society of Association Executives (OSAE), have been closely scrutinizing the final text of both tax bills since the Senate passage on Dec. 2, 2017, and there is an issue that ASAE is seeking some clarification on. The organization is concerned that vague language in a provision eliminating deductions for entertainment expenses could possibly, as an unintended consequence, be interpreted to apply to association membership dues. 

This issue falls under a provision in both the House and Senate bills intended to address deductions for "entertainment, amusement, recreation and other fringe benefits." Because the wording eliminates deductions for membership dues in "any club organized for business, pleasure, recreation or other social purposes," ASAE and its member organization want to seek clarification that association dues are not impacted. The House provision can be found here.

Importantly, ASAE's own general counsel believes that this provision would not apply to trade association or professional society dues; however, it is vague enough to wonder how the Internal Revenue Service (IRS) would interpret the language, and the language may conflict with other sections of the tax code that allow the deduction.

For this reason, OSAE is encouraging you to share the language with your own legal counsel and to contact your connections on Capitol Hill if this is an issue of concern to you and your organization. ASAE and OSAE believe strongly that members of professional societies and trade associations should be able to deduct membership dues as a business expense. 

The 501(c)(6) tax designation is defined by the IRS as applicable to business leagues. That language is close enough to the provision wording of "business club" in the tax bills that our organizations believe it is important to seek clarification. 

OSAE will keep you updated as this issue develops. If you have any questions, please contact the ASAE's public policy department at (202) 626-2788 or publicpolicy@asaecenter.org.