In this Week's Edition of Snapshot...
- Senate Finance Committee considers Mnuchin for Treasury Secretary
- Trump butts heads with House Republicans on key tax reform issue
- Council sends letter from Vikki to every Congressional office
- IRS issues guidance on rules for private foundation administrative expenses
- Updates to unrelated business income tax in new IRS publication
- In the States: Legislation affecting the work and finances of nonprofits
So, What’s Up with Tax Reform?
In the coming months, we will provide weekly updates with new developments in the tax reform process.
Hearing for Mnuchin to Become Treasury Secretary
Today, the Senate Finance Committee held a hearing to consider President-elect Trump’s nomination of Steven Mnuchin for Secretary of the U.S. Department of Treasury. The hearing is an opportunity for members of the Committee to ask questions and explore Mnuchin’s experience and qualifications to become the next Secretary of Treasury.
On the topic of tax reform, Mnuchin has stated in the past that there is no intent to repeal the charitable deduction. He did not express anything on the contrary in his remarks today.
Trump, House Republicans Disagree on Key Tax Issue
This week, President-elect Donald Trump has repeatedly expressed his disapproval of what is referred to as “border adjustability”.
This measure, which has the support of key House Republicans—including Speaker Paul Ryan (R-WI) and Ways and Means Chairman Kevin Brady (R-TX)—would tax imports but exempt American exports with the aim of encouraging more companies to keep their production in the United States. President-elect Trump has stated that he doesn’t “love” the idea of this, and finds it to be “too complicated.”
Though this provision does not have a direct impact on philanthropy, it has raised speculation that disagreement between the White House and Congress could delay the progression of tax reform.
It remains unclear exactly how this hiccup will affect the tax reform process, but President-elect Trump has indicated his willingness to work with House Republicans on tax reform issues.
Council Sends Letter to Every Congressional Office
Last week we sent a letter from Vikki to Members of Congress outlining our legislative priorities for tax reform and emphasizing the critical role that philanthropy plays in a thriving civil society.
This is just one piece of our ongoing work to engage with every single Congressional office. After all, every one of them will be casting a vote on tax reform legislation.
In the coming weeks and months, our government relations team will be walking the halls of Congress to meet with your Members—prioritizing first those who serve on the tax-writing committees in the House and Senate.
IRS Issues Guidance on Administrative Expenses for Private Foundations
To provide additional clarity on the rules for private foundations treating administrative expenses as qualifying distributions, the IRS recently released new guidance—which includes analysis and resources for interpreting and addressing this specific, technical tax issue.
We know that many of you often have questions about this particular issue, and encourage Council members to reach out to our legal team at firstname.lastname@example.org.
Updates to UBIT Rules
The IRS updated their publication on unrelated business income for exempt organizations.
The updates include increases to eligible costs of low-cost articles and associate member dues. They have also extended a special rule for contributions on capital gain made for conservation purposes, and permanently extended the exclusion from unrelated business income tax for qualifying payments under 512(b)(13)(E).
If you have questions on this or related matters, please contact our legal team at email@example.com.
Exclusive from our colleagues at the National Council of Nonprofits.
State Legislation Affecting the Work, Finances of Nonprofits
- Property Taxes: A pre-filed bill in Montana would remove the property tax exemption for any nonprofit that pays compensation greater than $250,000 to any officer, trustee, or key employee. Massachusetts legislation would require nonprofit hospitals to pay to its host municipality 75 percent of property taxes they would otherwise owe if not exempt from property taxes. The bill carves out an exception if a hospital has a standing payment in lieu of taxes (PILOT) agreement or other financial arrangement with the local government. Although unpublished as of yet, reports indicate that a bill in New Hampshire relating to the hospital property tax exemption is also in the works.
- Employment Policies: A bill in New Hampshire would increase the state minimum wage to $9.50 per hour initially and $12 per hour beginning in 2019, or defer to the federal minimum wage, whichever is higher. North Dakota legislation seeks to increase the state minimum wage from $5.85 per hour to $9.25 per hour and provide for adjustments by the state labor commissioner.
- Nonprofit Independence/Public Records: A North Dakota bill would exempt from public disclosure any donor records of nonprofits that are subject to open records laws. Currently, only donor records of nonprofits affiliated with higher education and the university system are exempt. The legislation is scheduled for a key vote in committee on Friday.