A new tax on nonprofits that was included in the Tax Cuts and Jobs Act (TCJA), implemented one year ago, is diverting substantial resources away from activity at nonprofit organizations, according to a new report, “How the TCJA’s New UBIT Provisions Will Affect Nonprofits.” On January 21, Independent Sector released the report, produced by the Urban Institute and based on a November 2018 survey, estimating the impact of the 21% Unrelated Business Income Tax (UBIT) on the employee parking and commuting benefits provided for employees at nonprofits. Here are some key findings:
• Nonprofit organizations participating in the survey reported they expect to pay an average of $10,456 each for the new transportation tax.
• Nonprofit organizations will face, on average, an additional $1,346 each in related administration costs concerning the new tax.
• The highest share of nonprofit organizations that participated in the survey and reported providing transportation benefits were focused on the arts, culture, and humanities (31 percent), followed by those focused on public and social benefit (16 percent).

Click here for resources and information from the League of American Orchestras on the Unrelated Business Income Tax. 

Posted January 28, 2019