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Senators Lankford, Coons Bill to Support Churches, Charities, and Nonprofits included in Funding Package

WASHINGTON, DC – Bipartisan legislation from Senators James Lankford (R-OK) and Chris Coons (D-DE) to protect churches, charities, and other nonprofit organizations is expected to become law as part of a bipartisan funding package agreed to by House and Senate negotiators today. The Lessening Impediments from Taxes (LIFT) for Charities Act repeals a section of the tax code that requires some tax-exempt organizations to pay federal taxes on employee benefits, such as parking, meals, or transportation benefits.

“It is welcome news that the LIFT for Charities Act has been included in the annual appropriations bill to be considered later this week,” said Lankford. “Several of us have worked for months to correct a small provision in the 2017 tax reform bill that required some churches and nonprofit organizations to pay a tax on employee benefits, which could include items that have never been previously accounted for, such as a parking space. Most nonprofits were neither equipped to handle the additional administrative burdens or compliance costs nor were they intended to be a source of revenue for the federal government. The fix included in this week’s appropriations bill is a huge win for our nation’s churches, charities, and other nonprofits who are dedicated to serving our neighbors and meeting the needs of our communities. We should protect our nonprofits, not tax them.”

“I believe that we have a moral obligation to support our neighbors most in need, and nonprofits play an essential role in doing just that,” said Coons. “Requiring these organizations to pay a federal tax on employee benefits, something they have never been required to do before, causes them to not only face an increased operating cost, but also an administrative burden. The passage of this bill will help to ensure that America’s charitable nonprofits and houses of worship are able to continue providing critical services to communities without undue burden.”

The 2017 tax law created the provision requiring charities to pay the new tax on employee benefits. In November 2018, Lankford and Coons sent a letter to the Secretary of the Treasury, Steven Mnuchin, expressing their concerns about the challenges faced by tax-exempt organizations, such as charitable nonprofits, houses of worship, and foundations, regarding compliance with new tax liabilities.

In November 2017, Lankford and Representative Mark Walker (R-NC) also introduced the Universal Charitable Giving Act in both the Senate and House, which would create a universal charitable deduction in addition to the standard deduction for individuals and married couples that do not itemize. Additionally, Lankford serves on the Senate Finance Committee.