HUNDREDS OF FAITH-BASED GROUPS DECRY ‘NONPROFIT PARKING TAX’ IN TAX RECONCILIATION BILL
More Than 650 Church and Ministry Leaders Join ECFA in Opposition
WINCHESTER, Va., June 18, 2025—The Evangelical Council for Financial Accountability (ECFA) sent a letter this week to Capitol Hill signed by more than 650 leaders in faith-based organizations. The group urged U.S. Senate leaders to ensure the elimination of the failed “nonprofit parking tax” from any tax legislation that advances in their chamber.
“The ‘nonprofit parking tax,’ a logically flawed and burdensome proposal, should be put back in its coffin before this bill advances any further,” they wrote.
A provision in the House-passed tax reconciliation bill resuscitates a policy that would require many nonprofits to add their employees’ qualified transportation fringe benefits, such as mass transit or parking arrangements, to their unrelated business income tax (UBIT) liability. This “nonprofit parking tax” was previously enacted in the 2017 Tax Cuts & Jobs Act (TCJA) and was considered such a failure that Congress repealed it in full two years later. Thankfully, the reconciliation bill text just released by the Senate Finance Committee this week does not include this provision.
The letter explains that language placed in the House-passed bill to exempt certain church organizations does not lift the burden off of many religious nonprofits, nor does it solve the underlying problem of taxing a tax-exempt group for an expense as if it was income.
The group added, “American givers intended those dollars for charitable missions serving communities in our nation and around the world, not for government coffers.”
The full letter text is pasted below and a full list of signers is available here.
Dear Chairman Crapo and Ranking Member Wyden,
As leaders of faith-based organizations, we write to respectfully draw your attention to a tax provision of significant concern in the House-passed reconciliation bill (H.R.1). The “nonprofit parking tax,” a logically flawed and burdensome proposal, should be put back in its coffin before this bill advances any further.
The 2017 Tax Cuts and Jobs Act contained a provision like this one that would direct nonprofit organizations to add their employees’ qualified transportation fringe benefits, such as mass transit or parking arrangements, to their unrelated business income tax (UBIT) liability. However, that mandate became so burdensome that Congress intentionally repealed it two years later. In fact, then-House Ways and Means Committee Chairman Kevin Brady, who had originally embraced the policy, was instrumental in removing it fully.
As faith-based organizations, we want to emphasize the burden of the current language in H.R.1 on our community. While the House-passed bill modifies the failed nonprofit parking tax by exempting eligible church organizations, many religious nonprofits will still be subject to the pending provision. This includes those that may never have needed to file a 990-T in the past. It is noteworthy and instructive for today’s context that Members of Congress in 2019 realized simply exempting church organizations was not the answer to the problem of the parking tax. They eliminated it completely.
We also wish to emphasize the disturbing nature of this parking tax because its logic is so fundamentally flawed. Imposing a new tax on a nonprofit’s expense as if it were income makes no sense, particularly not an expense made in the normal course of its tax-exempt charitable work. On this note, the text of the bill is very clear. What would be taxed is not what would normally be considered unrelated business income.
The Joint Committee on Taxation anticipates the federal government will extract more than $2.6 billion from nonprofits over the next ten years if this provision is enacted. As shocking as that sum is, it does not include significant new compliance costs that ministries large and small will incur to deal with this burden, as well as possible state-level obligations it would trigger. American givers intended those dollars for charitable missions serving communities in our nation and around the world, not for government coffers.
We ask that you ensure the elimination of the failed “nonprofit parking tax” from any tax legislation that advances in the U.S. Senate.
Thank you for your leadership and attention to these concerns.
Respectfully,
Signatures Available Here
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For more information on ECFA, or to speak with an ECFA spokesperson, contact Anna Hutsell at ahutsell@guardian.agency.
About ECFA
ECFA helps Christian nonprofits and churches maintain a healthy and trusted reputation to effectively reach the world for Christ. For decades, ECFA has been the gold standard for donors to find and evaluate accountable organizations that share their Christian values. ECFA uniquely partners with its members to help them build and maintain the financial accountability, responsible governance, and leadership integrity that results in donor trust. For more information about ECFA, including information about accreditation and a listing of ECFA-accredited members, visit ECFA.org or call 800.323.9473.