Nonprofit Resources

print

Early Christmas Gift? Repeal of the Parking Lot Tax Pending

print
The long-awaited repeal of Internal Revenue Code section 512(a)(7) appears all but assured as Christmas approaches. On December 17, 2019, the House of Representatives passed legislation extending a number of tax incentives and the following provision:

SEC. 302. REPEAL OF INCREASE IN UNRELATED BUSINESS

TAXABLE INCOME FOR CERTAIN FRINGE

BENEFIT EXPENSES.

(a) IN GENERAL.—Section 512(a) is amended by
striking paragraph (7).

(b) EFFECTIVE DATE.—The amendment made by

this section shall take effect as if included in the amend-

ments made by section 13703 of Public Law 115–97.*

 

The effective date of the provision relates back to the original enactment of section 512(a)(7), effectively making the repeal retroactive to the date of enactment. This repeal does not impact the disallowance of taxable employer deductions for qualified transportation fringe benefits.

What’s next?

The bill now goes to the Senate, where passage is expected. In addition, President Trump is expected to sign the bill once it is passed by both legislative chambers.

What should your organization do?

If the bill is passed, organizations that paid tax on disallowed fringe benefits (e.g., employer-provided parking tax benefits) may file an amended return seeking a refund of the tax paid.

Please contact us at info@capincrouse.com with any questions.

 

*Public Law 115–97 is the Tax Cuts and Jobs Act signed into law by President Trump on December 22, 2017.

Leave a Comment