ECFA President Dan Busby was interviewed this week on the Christian Broadcasting Network (CBN) program, The 700 Club in regard to the provision in the Tax Cuts and Jobs Act which imposes a tax on benefits that churches and nonprofits provide to their employees, including parking in the facility’s parking lot or garage.
“There are nearly 15 million employees that work in the United States for nonprofits. That’s nearly 10% of the work force,” Busby stated. “So that’s 15 million parking places, and conservatively, it is going to cost the nonprofit community as a whole up to a billion dollars.”
The issue is gaining attention nationwide because churches and nonprofits will see their budgets cut by up to $1 Billion dollars, or they will have to raise another billion in charitable contributions. This includes the tax, the cost of preparing Form 990-T’s, the administrative effort required to file the annual form, and more.
ECFA’s 2,300 member organizations alone account for over 100,000 employees in the U.S., which equates to 100,000 parking spaces that are subject to tax. The total number of church and nonprofit employees in the U.S. is approximately 15 million.
There is also a great deal of ambiguity as to how the tax will be calculated. Nonprofits will be subject to unrelated business income tax on the cost of the parking provided. A nonprofit organization that simply allows its employees to park in a parking lot or garage that is part of the organization’s facilities will be subject to a tax on the cost of the parking provided. How the parking costs must be measured remains to be addressed in the “regulations or other guidance” to be issued by the IRS.
In response, ECFA has spearheaded a Position Statement which calls for a repeal of the burdensome tax retroactively to January 1, 2018. At the time of this news item, over 1,600 organizations have signed on to the Position Statement.
To view and sign the Position statement, click here.
To see CBN’s coverage of the parking tax issue, click here.