Print Friendly, PDF & Email

Bill to Retroactively Repeal Nonprofit Transportation Fringe Benefit Tax Passed by House Ways and Means Committee

On Thursday, June 20, 2019, the House Ways and Means Committee passed H.R. 3300, officially called the “Economic Mobility Act of 2019” (the “Bill”).  The Bill, among other things, repeals the unrelated business income tax (UBIT) on nonprofits providing employees with qualified transportation fringe benefits.

AAFCPAs is also pleased to report that the Bill states this repeal will be retroactive, as if the original provision was never included in the Tax Cuts & Jobs Act (TCJA).  The Committee did not provide guidance on how tax-exempt organizations would go about requesting or receiving a refund, nor how this would affect amounts paid to states.

The Bill still needs to be approved by the House of Representatives and the Senate, but the passage in the House Ways and Means Committee is a strong step towards retroactive repeal. AAFCPAs is optimistic the Bill will pass based on details located in the roll call indicating bipartisan support. Kevin Brady, the ranking member of the House Ways and Means Committee, offered an amendment to the Bill that would strike every provision except the one pertaining to the repeal of the excise tax on nonprofit organizations providing qualified transportation benefits. This amendment, which only lost by a handful of votes, demonstrates that while many of the other provisions of the Bill may not be supported, everyone in the House Ways and Means Committee agreed, at the least, that the provision of the TCJA taxing nonprofits providing qualified fringe benefits should be repealed.

We urge nonprofit clients to take this SURVEY conducted by the National Council of Nonprofits to show Congress how detrimental the original provision in the TCJA was to your mission and to continue to urge them to quickly repeal the law.

We continue to remind clients that the TCJA represents a dramatic overhaul of the U.S. tax code, and we expect legislative action such as the Bill mentioned above to only intensify.

As always, the tax practice of AAFCPAs will continue to monitor the legislative process and keep you informed as significant changes occur or provisions become clarified. If you have any questions please contact: Christopher Consoletti, Esq. at 774.512.4180, cconsoletti@nullaafcpa.comJosh England, Esq., LLM at 774.512.4109, jengland@nullaafcpa.com; or your AAFCPAs Partner.

About the Authors

Chris Consoletti
Chris, in conjunction with our multi-disciplinary team of CPAs, investment & business advisors, provides effective tax planning and research, tax compliance, charitable planning, and asset protection solutions for individuals and their families, trusts & estates, nonprofits & foundations, corporations and partnerships. He has expertise in tax law pertaining to wealth preservation vehicles and will use all of the rules under the law to ensure that AAFCPAs’ clients have every opportunity to protect and save their assets. He engages clients in in-depth discussions to identify what assets need to be shielded, and what current measures are in place for risk management. 
Joshua England, Tax Attorney
Josh is a tax strategist with extensive expertise advising high-net-worth individuals, nonprofits, and business owners and investors on effective strategies to ensure tax efficiency, asset protection, well-executed succession plans, and wealth preservation. He has been practicing law since 2000 and focuses his practice on the areas of wealth transfer planning, fiduciary and individual taxation, business structuring to maximize tax efficiency, and advising tax-exempt organizations, foundations and charitable donors.