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USCCB Religious Liberty Alert: Urge Congress to Repeal "Parking Lot Tax"

November 26, 2018 by Jeff Caruso

Please take action today!

Urge your Representative and Senators to repeal the "Parking Lot Tax!"

A provision in the Tax Cuts and Jobs Act of 2017 would impose a new tax on parking and transit benefits provided by nonprofit organizations, including churches. This change, also known as Section 512(a)(7) of the law, taxes nonprofit organizations - including houses of worship - for the cost of parking and transit benefits provided to employees. The provision forces nonprofits and houses of worship to shoulder burdensome accounting and regulatory compliance costs, and it will hopelessly entangle the IRS with houses of worship. Moreover, according to the Joint Committee on Taxation's score of a full repeal of Section 512(a)(7),the provision would extract $1.7 billion from the non-profit sector over 10 years.  While non-profit organizations and houses of worship will pay these taxes, it is the people these organizations serve who will ultimately suffer from this massive diversion of funds from civil society to the government.
 
Contact your U.S. senators and representatives today and ask them to repeal Section 512(a)(7) and stop this new tax on churches and nonprofits!

Background
 
A provision in the Tax Cuts and Jobs Act of 2017 would impose a new tax on parking and transit benefits provided by nonprofit organizations and churches. This significant change in the treatment of charitable organizations will require many nonprofit organizations to file federal Form 990T and pay federal taxes on the cost of parking and transit benefits provided to their staff. Not only does this provision impose a new tax on nonprofits, it also requires nonprofits and houses of worship to shoulder burdensome accounting and regulatory compliance costs.
 
Perhaps worst of all, this provision will hopelessly entangle the IRS with houses of worship. For good reasons grounded in the First Amendment, houses of worship are not required to file tax returns each year. This longstanding policy allows houses of worship to operate independently from the government and shields houses of worship from government interference and intrusive public inspection into their internal, constitutionally protected operations, as nonprofit tax returns are available to the public.
 
The Joint Committee on Taxation's score of a full repeal of this provision, Section 512(a)(7), tells the story of the toll this provision will take on the charitable sector: $1.7 billion over 10 years. Whatever purpose Section 512(a)(7) was intended to serve cannot justify extracting $1.7 billion in taxes from nonprofits and houses of worship within just 10 years. If Congress does not act to repeal this tax, it is the people served by charitable organizations and houses of worship who will ultimately suffer from this massive diversion of funds from civil society to the government.

Read more: www.usccb.org/issues-and-action/religious-liberty/upload/Letter-on-Parking-Lot-Tax-November-13-2018.pdf

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