The Soapbox and Toolbox for New York State's Nonprofits

March 15, 2019

Policy Push: NYS Senators, Please Cosponsor S. 632, the “LIFT for Charities Act

The LIFT for Charities Act would repeal a provision of the Tax Cuts and Jobs Act, now codified as Internal Revenue Code Section 512(a)(7), that imposes a 21-percent unrelated business income tax on the expenses that tax-exempt nonprofits incur for providing to their employees transportation fringe benefits, such as parking and transit passes. As interpreted by the Treasury Department and the IRS, charitable nonprofits, houses of worship, foundations, and other nonprofits must pay this new tax not only on the amount of direct expenditures they make, but also on the amount that their employees ask to have withheld from their paychecks on a pre-tax basis, that is, voluntary salary reduction agreements made pursuant to federal law. 



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