In This Week's Edition of Snapshot...
- Senate Vote on National Emergency Declaration Approaching
- LIFT Charities Act Reintroduced
- States and Localities Look to Nonprofits and Foundations for Fees, Taxes, and PILOTs
- Montana Public Campaign Disclosures Law Preserved
The Senate could vote as soon as next week on the disapproval resolution to block President Trump’s national emergency declaration. The resolution, passed by the House last week, is expected to pass the Senate with a simple majority—51 votes— given that several Republican senators, including Senators Lisa Murkowski (R-AK), Thom Tillis (R-NC), Susan Collins (R-ME) and Rand Paul (R-KY) have expressed their support already. The resolution would prevent the president from redirecting billions from other appropriations towards his border wall. President Trump indicated that he would use his veto power if the resolution is brought to his desk.
Other Republican senators are trying to get a vote on a different disapproval resolution. They want to vote for a resolution that states the president should have enough funds for border security, but want to express disapproval of the emergency declaration and amend the National Emergencies Act to require future emergency declarations to expire after a period unless Congress votes to approve them. Republicans are still trying to figure out if under current parliamentary procedures this could be possible.
Some Republicans believe that under the current National Emergencies Act, Democrats could vote on a disapproval resolution every six months, since the legislation requires Congress to vote no later than six months after a national emergency has been declared on a concurrent resolution to determine if an emergency declaration should be terminated.
Last week, Senators James Lankford (R-OK) and Chris Coons (D-DE) reintroduced the Lessen Impediments From Taxes (LIFT) for Charities Act (S.632) to repeal the UBIT provision, enacted in the 2017 tax overhaul, related to the tax that nonprofits and foundations now have to pay on transportation fringe benefits. In support of the bill, Gene Cochrane, the former Council on Foundations Interim President and CEO said, "We have heard from our members…about the burdens both financially and administratively that these provisions are now causing our members and their charitable grantees and will continue, if not repealed. It is our hope that this bill is acted upon quickly to provide needed relief to the sector.”
On Tuesday, a companion bill, LIFT for Charities Act (H.R.1545), was reintroduced in the House by Representatives Mark Walker (R-NC) and Tom Suozzi (D-NY). Other bills have been introduced to repeal the UBIT fringe benefits provision, including the Stop the Tax Hike on Charities and Places of Worship Act (H.R. 1223), introduced by House Majority Whip James E. Clyburn (D-SC), and the Nonprofits Support Act (H.R. 513), introduced by Rep. Michael Conaway (R-TX). Rep. Conaway’s bill would also repeal the UBIT provision know as siloing that requires nonprofits and foundations to calculate and pay taxes on each separate nonrelated business activity.
If Congress does not act soon on any of these bills mentioned, tax exempt organizations will have to pay taxes on unrelated income business activities for benefits such as employees’ transportation by April. 15, 2019.
Exclusive from our colleagues at the National Council of Nonprofits.
Every year, lawmakers at the state and local levels look to tap the resources of charitable organizations to fill government budget gaps. 2019 is no different. For instance, a bill in South Carolina would authorize local governments to impose fees on nonprofit hospitals and higher education institutions. If organizations fail to pay the fees, the bill would allow local governments to petition the Department of Revenue to remove nonprofit status for purposes of state income taxes and require withholding of state appropriations institutions of higher education. In Idaho, state lawmakers are considering changing the requirements for property tax exemption for hospitals. Under the proposed language, only property housing 24-hour emergency care facilities would be eligible for tax exemption, for the first time imposing property taxes on separate administrative and other medical facility buildings.
Foundations, nonprofits, and churches are now being assessed taxes for parking by the City Council in Grand Island, Nebraska. For-profit businesses in the city previously paid an assessment to allow for free parking downtown for visitors. Nonprofits were exempt from the occupation tax, which covered the parking costs. The city is now taxing all employers, including tax-exempt nonprofits and houses of worship, via a special assessment based on square footage owned. “It is hard on nonprofits to have an additional assessment when it probably isn’t in their budgets and they don’t have the income to offset that at least the initial year,” stated Dana Jelinek, Executive Director of the Grand Island Area Habitat for Humanity.
The Board of Selectmen in Milton, Massachusetts voted to send letters to the three largest nonprofit landowners in the community seeking voluntary payments in lieu of taxes (PILOT). Unlike in many other communities, the local government appears to recognize that it lacks the authority to mandate payments and must seek cooperation with area nonprofits. The “charge” of the PILOT Committee acknowledges: “Once an organization is granted an exemption, the Town cannot legally require that organization to pay a property tax or bind that organization to give up the rights to these legal exemptions.”
The U.S. Supreme Court declined to consider a challenge to Montana’s campaign finance law, leaving strong disclosure provisions in effect. The “Disclose Act,” enacted in 2015, expanded the groups that must disclose election-related financial information, particularly for electioneering communications. Opponents sought to have the law struck down, claiming it burdens free speech, but a lower court ruled the new law constitutional. The state’s governor spearheaded the law, claiming that both Republicans and Democrats “have problems both inside and outside our parties.”