New Bills Introduced to House and Senate Would Repeal Rule Forcing Churches and Other Nonprofits to Pay Taxes on Employee Benefits

Bills have been introduced in both the House and Senate that would repeal a provision in the country’s new tax law that makes churches and other nonprofits vulnerable to having to pay new taxes.

Sen. James Lankford, R-Okla., and Sen. Ted Cruz, R-Texas, introduced on Wednesday separate bills designed to eliminate new tax burdens that many churches and nonprofits have been concerned about since the passing of the Republican-backed tax law last year.

Lankford’s bill, which was introduced in the House last week by Rep. Mark Walker, R-N.C., is called the Lessening Impediments from Taxes for Charities Act. The legislation would repeal the provision that requires some tax-exempt organizations to pay federal taxes on employee fringe benefits such as parking, meals and transportation for the first time.

The provision requires churches that have never had to fill out an IRS Form 990 to begin filing the form.

“Tax reform was designed to simplify tax filing, not make it more complicated or burdensome,” Lankford said in a statement. “By definition, tax-exempt organizations do not typically file tax returns. But, a glitch in last year’s tax reform bill would become a huge burden to churches, charities, and non-profit organizations.”

“Most churches and nonprofits in Oklahoma, especially in rural locations, are not equipped to handle major tax code changes,” he added. “Non-profit, tax-exempt entities are designed to better our communities and our nation.”

A representative from Lankford’s office told CP that they are hopeful that the bill will receive a vote on the floor of the Senate but added that no date for a vote has been set.

Cruz introduced the Protect Charities and Houses of Worship Act.

“Last year, Congress passed historic tax cuts which are expanding opportunity and allowing hardworking men and women to keep more of their hard-earned money in their pockets,” Cruz said in a statement. “While millions of middle-class Americans have seen significant tax relief, charities, churches, and other tax-exempt organizations have been required to pay federal taxes on employee fringe benefits. My bill would repeal this requirement, and allow these charitable organizations to allocate funds and donations for their intended purpose of helping people, rather than for paying taxes to the federal government.”

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SOURCE: Christian Post, Samuel Smith