In This Week's Edition of Snapshot…
- Agreement on Government Funding
- Legislation to Repeal SALT Cap Introduced
- Senators Sent Letter to Treasury on Opportunity Zones
- Gearing Up for Census 2020
- Nonprofit and Foundation Property Tax Exemptions Under Review
- Federal Shutdown’s Impact on Small Nonprofits
This week, members of the House and Senate Appropriations Committees agreed on a spending deal that would keep the Homeland Security, State, Agriculture and Commerce departments, along with other government agencies, open through Sept.30.
The bill, H.J.Res.31, is a compromise between Republicans and Democrats—who have spent the past weeks in negotiations to avert another partial government shutdown before Friday’s midnight deadline. The bipartisan border security deal includes $1.38 billion for 55 miles of physical barriers along the U.S.-Mexico border, falling short of the $5.7 billion requested by President Trump. The bill is expected to pass on both the House and Senate later today, with President Trump expected to sign it despite his criticism of the lack of funding for his proposed border wall. Should the President decide not to sign this spending bill, the same government agencies will likely shut down again at midnight February 15th.
Yesterday, President Trump told reporters “I don’t want to see a shutdown. Shutdown would be a terrible thing,” when referring to other ways of building the U.S.-Mexico border wall, the President said “we have options that most people don’t really understand,” The Hill reported.
On Monday, Senate Finance Committee member Bob Mendez (D-NJ) and House Ways and Means member Bill Pascrell (D-NJ) announced the introduction of the Stop the Attack on Local Taxpayers Act.
The bill would repeal the $10,000 cap on state and local tax (SALT) deduction imposed by the 2017 tax overhaul by restoring the top individual income tax rate to 39.6%. During a press conference to unveil the legislation Rep. Pascrell said, “The vast majority of those claiming the deduction are middle-class households, especially in New Jersey, and the deduction helps local governments raise revenue for needed projects….” Rep. Chris Smith (R-NJ) is an original cosponsor of the legislation.
A spokesperson for Senate Finance Committee Chairman Chuck Grassley (R-IA) said that the Chairman had no intensions in discussing the SALT cap, POLITICO reported. On Tuesday, New York governor Andrew Cuomo met with President Trump to discuss the SALT cap among other issues.
Last week, Senate Finance Committee member Michael Bennet (D-CO) and Senate Small Business and Entrepreneurship Committee member Chris Coons (D-DE) sent a letter to Treasury Secretary Steven Mnuchin regarding Opportunity Zones. In the letter, the Senators asked Mr. Mnuchin to protect and preserve the original intent of the Opportunity Zone tax incentive as the department moves forward with clarifying the proposed regulations to investors.
Opportunity Zones are areas in low-income census tracks designated by governors where private equity investors can invest capital gains in new development ventures in exchange for tax forgiveness after 10 years.
The Treasury department held a hearing today at 10:00 a.m. on Investing in Qualified Opportunity Funds.
Exclusive from our colleagues at the National Council of Nonprofits.
The 2020 Census is only 14 months away, and many states are finally taking steps to ensure that their residents are counted. An effort is underway in Arizona to appropriate $5 million for census outreach and communication activities. Connecticut is also seeking to expand participation in the census through by establishing a grant program to assist municipalities in developing and implementing census outreach programs. An Illinois bill would create the 2020 Census Grant Program to issue matching grants to local governments and nonprofit organizations. It would also establish the 2020 Census Grant Program Panel and require the Governor to include $33 million for the 2020 Census Grant Program in his budget. A separate bill would appropriate $25 million for “grants to community providers and local governments for the purposes of encouraging full participation” in the census. Nationwide, nonprofits are reaching out to their elected officials to engage and ensure the 2020 Census is fair, accurate, and complete.
While decisions at the federal level are causing states to revise their income and sales taxes, numerous bills are also pending in legislatures across the country to revise or undermine the exemption from property taxes that foundations and charitable nonprofits receive in all 50 states. A very troubling bill introduced in Montana last week seeks to delay for ten years the effective date of any newly recognized property tax exemption, thereby forcing a nonprofit or foundation purchasing property in the state, or a new nonprofit startup, to pay property taxes for a decade. The Montana Nonprofit Association is actively opposing that measure, as well as a bill that would revoke the property tax exemptions of nonprofits and foundations that pay executives more than $250,000.
Legislation in Connecticut would allow municipalities to impose service charges on nonprofits and foundations, apparently in a constitutionally suspect attempt to circumvent property tax exemptions. Two bills in the Rhode Island Legislature look to impose property taxes on larger nonprofit institutions in the state. One measure would authorize municipalities to tax nonprofit properties, including all property of nonprofit hospitals, colleges, or universities within a city or town that is vacant, used for parking, or not “wholly and exclusively utilized for the purposes set forth in their respective charter, or applicable provisions of general or public laws.” Separately, a legislator is seeking to impose a municipal payment, or fee, equal to 65 percent of property taxes, on a nonprofit hospital that has converted from a for-profit hospital.
Not all legislative action is hostile to nonprofits and foundations. Arizona lawmakers are considering a constitutional amendment to clarify, but not alter, the property tax exemption for foundations, charitable nonprofits and other organizations. A Georgia legislator is proposing a ballot question to extend the ad valorem tax exemption to buildings used by a nonprofit charitable institution for primary or incidental purposes. Legislation in Maryland would extend the property tax exemption to nonprofit museums that are open to the public and do not charge an admission fee. A reform bill in Tennessee would, among other things, expand the nonprofit property tax exemption to apply to properties of specific educational institutions and children’s hospitals.
Federal Shutdown’s Impact on Small Nonprofits
Small nonprofits as well as a multitude of small businesses across the country were impacted economically by the 35-day partial shutdown of the federal government. Read our statement to the House Small Business Committee explaining how nonprofits are affected when the government shuts down, both as small businesses and as service providers that rely on federal funds to serve the nation’s most vulnerable populations.