Law Taxing Nonprofits on Transportation Benefits Repealed

December 26, 2019

By Michael Clifford

On Friday, December 20, 2019, President Trump signed into law the 2020 spending bill brought forth to him by both the Senate and the House of Representatives, and which prevented a government shutdown and made major changes to the U.S. health policy.  The spending bill also included a provision reversing the 21% unrelated business income tax (“UBIT”) on qualified transportation which was part of the Tax Cuts and Jobs Act of 2017.  The benefits that are affected include qualified parking and transit pass programs. 

It is anticipated the repeal of the fringe benefits tax will be retroactive for taxes that have paid or accrued after December 31, 2017. We would expect that there would be a mechanism for exempt organizations to request refunds of UBIT previously paid under this provision.

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