05/03/2018

ASAE Meets With JCT on Fringe Benefits

This marks the organization's second meeting in the past two weeks on this topic

The American Society of Association Executives (ASAE) and a small group of tax-exempt stakeholders met with Joint Committee on Taxation (JCT) officials to discuss a provision in the new tax law affecting fringe benefits, such as parking and transportation.

This is the second meeting in the past two weeks that ASAE has held on fringe benefits, following a meeting last week with Treasury officials. In both meetings, ASAE has stressed that the new law disproportionately hurts tax-exempt employers by requiring them to pay a new unrelated business income tax (UBIT) on the value of benefits. ASAE contends this is a new tax on an expenditure, not a revenue-generating activity.

In the meeting with JCT this week, ASAE said the lack of guidance for tax-exempt entities in this area has created a lot of confusion and conflicting opinions about how nonprofit organizations should go about calculating their tax liability to comply with the requirement. Many organizations are already making estimated payments to the IRS on this expense – absent any guidance – which further supports the request for a delay in implementing this requirement.

Joint Committee staff is responsible for preparing “bluebooks,” which provide explanations of each provision in the tax law and context for why changes were made. ASAE has also pointed out in these meetings with JCT and the administration that some cities, including Washington, D.C., New York and San Francisco, have mandated that employers provide pre-tax mass transit benefits, so employers in those cities do not have the option of changing those benefits to avoid being taxed. ASAE has suggested that special consideration be given for employers in localities that mandate transportation benefits.

This article was provided to OSAE by the Power of A and ASAE's Inroads.