Churches, Nonprofits Fear New Tax Laws May Force Many of Them to Pay Taxes for First Time

(Provided/Jackie Sunday of Mount Pleasant)

Dozens of South Carolina churches and nonprofits are beginning to voice concern that parts of the recently enacted federal tax reform could hurt them, and even make many of them pay taxes for the first time.

The tax-code rewrite calls for churches, hospitals, colleges and other traditionally tax-exempt groups to begin paying a 21 percent tax on some fringe benefits, such as parking spaces or moving expenses, that they provide their employees.

The changes were designed to rid the code of tax breaks for employee benefits, such as parking, meals and moving expenses.

Meanwhile, there’s also the larger concern that the new tax code’s larger personal deductions could reduce giving across the country. An estimate from the Urban-Brookings Tax Policy Center predicted that impact could reduce charitable deductions by $12 billion and $20 billion this year.

Nate Gibson, director of business operations at Mt. Horeb United Methodist Church in Lexington, was trained as a certified public accountant and has been keeping a watchful eye on the changes.

“There are going to be a lot of people happy with the new tax code. Big business gets cuts,” Gibson said. “The nonprofit organizations that are being held to the same standards, we don’t get the tax cuts. It’s only a net negative for us. There’s a reason we’re nonprofit. We’re doing things on the skinny. That is a big highlighting concern.”

And there are more specific concerns, as well.

The Evangelical Council for Financial Accountability has circulated a petition calling attention to the change, specifically noting that the Tax Cuts and Jobs Act would require churches and nonprofits to be taxed on parking that they provide to their employees.

“The very purpose of tax exemption for nonprofit organizations is not to have their charitable, religious and educational activities on the same footing as taxable businesses because of their important work and the inherent challenges associated with raising money to support that work,” their petition said.

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SOURCE: Robert Behre
The Post & Courier