Tax on Certain Fringe Benefits Repealed and Single Excise Tax Rate Set
by Wendy Campos, Partner and Steve Talbot, Manager, Not-for-Profit Practice
Certain tax-exempt organizations stand to benefit from tax-law changes contained in legislation signed into law on December 20, 2019.
The legislation repeals a provision of the Tax Cuts and Jobs Act of 2017 that classified qualified transportation benefits, qualified parking facilities, and on-premises athletic facilities as unrelated business income for tax-exempt organizations.
The repeal would be retroactive to the passage of the 2017 tax-reform bill and allow organizations that paid unrelated business income tax on these fringe benefits to seek a refund.
For private foundations, the legislation establishes an across-the-board 1.39% excise tax on net investment income as opposed to the two-tier excise tax previously imposed where foundations were taxed at either 1% or 2%. The 1% rate applied to those private foundations whose qualifying distributions equaled or exceeded a certain threshold.
The new tax rate goes into effect for taxable years beginning after the date this legislation was enacted.
We’re Here to Help
Contact your Moss Adams tax-exempt advisor to learn more about how this legislation could affect your organization.
Wendy Campos has practiced public accounting since 2000 with a focus on tax-exempt organizations. She consults with clients on unrelated bus">iness income, obtaining and maintaining tax-exempt status, uncertain tax positions, excess benefit transactions, Form 990, and more. She can be reached at (503) 478-2165 or wendy.campos@mossadams.com.
Steve Talbot has practiced public accounting since 2013. He serves a range of tax clients, including individuals, corporations, and not-for-profit entities. He can be reached at (505) 878-7283 or steve.talbot@mossadams.com.
The material appearing in this communication is for informational purposes only and should not be
construed as legal, accounting, tax, or investment advice or opinion provided by Moss Adams LLP.
This information is not intended to create, and receipt does not constitute, a legal relationship,
including, but not limited to, an accountant-client relationship. Although these materials have been
prepared by professionals, the user should not substitute these materials for professional services,
and should seek advice from an independent advisor before acting on any information presented.
Moss Adams LLP assumes no obligation to provide notification of changes in tax laws or
other factors that could affect the information provided.
Assurance, tax, and consulting offered through Moss Adams LLP. Investment advisory services offered through Moss Adams Wealth Advisors LLC. Investment banking offered through Moss Adams Capital LLC.