Donald Trump’s Tax Plan Could Have Churches Paying Thousands of Dollars More

When Congress passed a sweeping tax reform bill in late 2017, little was said about how nonprofit organizations like churches, colleges and hospitals would be affected. 

But the tax-code rewrite could cost some of these groups tens of thousands of dollars by forcing historically tax-exempt organizations to begin paying a 21 percent tax on employee fringe benefits, according to a report by Politico.  

One organization, the Jewish Federations of North America, told the news outlet it is already expecting a new $75,000 tax bill in 2018 due to the change.

These fringe benefits often include things like providing company vehicles for employee commutes or, in the case of a college or university, providing a free shuttle between campus locations. Other common benefits involve things like health insurance, childcare reimbursement, and other medical accommodations. 

For many of the nonprofits, this will mark the first time they file tax returns, and it may place small staffs under strain as they work through the process. 

This tax code is a part of the Republican overhaul tax reform bill that was passed in December of 2017. The law, titled the Tax Cuts and Jobs Act, also provided larger tax breaks for the wealthy and kept intact some middle class benefits like student loan interest deductions and medical deductions. 

"This is something that Republicans wanted for years and Democrats wanted for years, and yet it never got done," President Donald Trump said when he signed the bill into law. "Who would object to trillions of dollars being brought back into our country? Nobody. But it never got done. Now it’s being done."

The idea behind taxing nonprofit fringe benefits is to treat these organizations the same as any other business. But some argue that the entire idea of tax exemption for nonprofits is that their mission is to provide a social good rather than to make a profit.

This month the National Council for Nonprofits, which is the largest network of charitable organizations, called on the IRS and Treasury Secretary Steven Mnuchin's office to delay implementation of the tax on fringe benefits. The council had already sent a statement with preliminary comments on the bill in late April.

"In the weeks since that statement was delivered to your offices, hundreds and perhaps thousands of charitable organizations, houses of worship, and foundations have raised additional questions and submitted substantive statements about the very pressing need for guidance before they can comply with the new requirements," the letter read.

One Republican lawmaker who is working to battle this piece of the legislation is Representative Michael Conway.

Earlier in June, Conway introduced the Nonprofits Support Act in an attempt to kill the tax, but no further action has been taken regarding the legislation.

This tax-code rewrite is likely to hurt religiously affiliated nonprofit organizations that have been longtime supporters of the Trump administration.

GettyImages-897241798 President Donald Trump holds up a copy of legislation he signed before signing the tax reform bill into law, in the Oval Office, on December 22, 2017. The tax reform bill, which passed into law last year, may cost nonprofits tens of thousands of dollars. Chip Somodevilla/Getty Images

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