The Score | Urgent Concerns About New U.S. Tax Rules

Orchestras are joining other nonprofit organizations to speak up in opposition to an unprecedented federal tax on expenses at nonprofits. The tax reform provisions signed into law last December include a new requirement for nonprofits to pay Unrelated Business Income Tax (UBIT) equal to 21 percent of the value of commuting and parking benefits provided to employees. Since many orchestras offer parking and transportation benefits for staff and musicians, the costs of this new tax on nonprofits could be considerable. The League of American Orchestras has partnered with the broader nonprofit sector in meetings with officials at the U.S. Treasury Department, contributed to a Politico article on this topic, and has filed comments on behalf of orchestras to Treasury and Internal Revenue Service leaders requesting a delay in implementation and immediate action to clarify the many outstanding questions about the new rules. While no guidance has been issued by the IRS to clarify which benefits are subject to the tax and how to value certain benefits, the new requirements took effect on January 1, 2018. For more information, visit the Visa, Tax, and Travel pages at americanorchestras.org/.