ADF Church Alliance senior counsel Ray Kaselonis shares important information for MTSBC churches. You might have heard that the parking provided to church employees may now be taxed by the federal government.
In last year’s Tax Cuts and Jobs Act, a small but powerful provision was enacted that changed the federal tax code. But this seemingly little provision could be used to raise a huge amount of money for the government. And where would that money be coming from? Tax-exempt churches, like yours, all across America.
There’s a lot left to be determined about how the law will affect non-profits—and churches in particular. But we do know that a plain reading of the language in the law potentially taxes the costs “paid or incurred” for non-profits to provide employees with parking.
We also know that the law is taking a very unusual approach in raising revenue because it’s considering the costs “paid or incurred” to provide parking as an income tax – specifically “unrelated business taxable income.” First, like you, ADF wonders how costs “paid or incurred” could ever be considered “income.” And second, since when is providing parking to your employees an “unrelated business” of the church?
These changes to tax law don’t make sense on many levels. And they potentially have religious freedom implications.
The good news is we’re not alone in our desire to see this law fixed. Four separate bills have been introduced in Congress to repeal it.
We, at ADF Church Alliance, are actively monitoring this situation from both a constitutional and legislative perspective, and members can contact us with any questions about this law.
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