The National Association of Evangelicals acknowledges the interim guidance issued by the Treasury Department on December 11, 2018, on “Parking Expenses for Qualified Transportation Fringes Under § 274(a)(4) and § 512(a)(7) of the Internal Revenue Code.” The notice specifies how churches and other nonprofit organizations should calculate a new 21 percent tax imposed by Congress on parking and transportation benefits provided to their employees.
For 2018, tax-exempt organizations will be able to use any reasonable method to calculate the expenses that are subject to the new tax. The NAE is grateful for efforts by the department to minimize the impact on churches and nonprofits by allowing changes made by March 31, 2019, to be applied retroactively.
The action by the Treasury Department does not absolve Congress of the need to repeal § 512(a)(7) of the Tax Cuts and Jobs Act of 2017. While the tax burden on some nonprofits may be reduced, it will still redirect resources from their missions.
“Congress, the ball is in your court. Treasury has done its best; it is up to you to repeal this tax. Please do this before you go home for Christmas,” said Galen Carey, NAE vice president of government relations.
Under the new law, many churches will be required to file tax returns with the Internal Revenue Service for the first time. All nonprofits face the burden and expense of complex calculations and possible changes to their parking arrangements in order to be in compliance.