At more than 1,100 pages, H.R. 1: One Big Beautiful Bill, isn’t what anyone might call leisurely reading.
Containing many of President Trump’s campaign promises, the legislation aims to defund Planned Parenthood, make the 2017 tax cuts permanent and increase the Child Tax Credit, among just three of its top, positive features.
But buried within the bill is also something called a nonprofit parking tax, a curious, onerous, and wildly imaginative policy that threatens to siphon donation dollars from charitable organizations struggling to stretch their funds as far as possible.
Originally passed in 2017 as part of the “Tax Cuts and Jobs Act” (TCJA), the provision required nonprofits to treat the cost of employee parking spaces as taxable income to the organization. In other words, if a religious nonprofit paid $100,000 to repave or seal their parking lot, and another $50,000 to plow it throughout the winter, the organization would be on the hook for paying taxes on $150,000.
The novel idea of paying taxes on expenses rather than on income caused an absolute uproar, not to mention financially burdening nonprofit groups to shell out money to the government that was given to help the organization pursue their mission. The blowback led to its eventual repeal.
So, why is it back?
Clearly, the government is in a desperate search for funds, and many bureaucrats never met a tax they didn’t like. Others have speculated some legislators pushing this are hostile to religious nonprofits and want to financially hamstring them as much as possible.
Michael Martin, President and CEO of the Evangelical Council for Financial Accountability (ECFA), calls the proposed provision “an egregious mistake.”
“Legislators did exempt eligible church organizations this time, but that does not solve the problem for many Christian nonprofit ministries serving in our communities locally and abroad,” he writes. “It also does not address the disturbing assumption underlying the provision. Fundamentally, imposing a tax on a mission-centered expense as if it were income makes no sense, nor does subjecting ministries to significant new compliance costs to deal with that burden.”
The ECFA is inviting concerned citizens to sign a letter urging Congress to vote no on this latest effort to tax nonprofit organizations.
If the government can tax parking spaces and declare them a benefit, what’s to stop them from taxing water fountains, break room refrigerators, microwaves, vending machines, and even restrooms?
Congress needs to “park” this absurd effort in a proverbial tow-away zone, once and for all.
Image from Shutterstock.