As part of its year-end spending package in December 2019,
Congress repealed the controversial tax on not-for-profits
established by the Tax Cuts and Jobs Act (TCJA). The TCJA
provision, which took effect January 1, 2018, made an
organization's expenses associated with "qualified
transportation fringes," such as certain parking arrangements,
van pools and transit passes, subject to the unrelated business
income tax (UBIT) rate of 21%. Many not-for-profit organizations
have struggled with the increased administrative cost and
compliance burden.
The repeal is retroactive for taxes paid after December 31,
2017. As of this writing, further details of the repeal had not yet
been released, but not-for-profits that paid the tax in 2018 or
2019 will receive refunds.
