TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Wednesday, June 27, 2018

Republican Tax Law Hits Churches

Politico, Republican Tax Law Hits Churches:

Republicans have quietly imposed a new tax on churches, synagogues and other nonprofits, a little-noticed and surprising change that could cost some groups tens of thousands of dollars.

Their recent tax-code rewrite requires churches, hospitals, colleges, orchestras and other historically tax-exempt organizations to begin paying a 21 percent tax on some types of fringe benefits they provide their employees.

That could force thousands of groups that have long had little contact with the IRS to suddenly begin filing returns and paying taxes for the first time.

Many organizations are stunned to learn of the tax — part of a broader Republican effort to strip the code of tax breaks for employee benefits like parking and meals — and say it will be a significant financial and administrative burden.

It also means political peril for lawmakers, many of whom were surely unaware of the provision when they approved the tax plan. Churches’ tax-exempt status, in particular, has long been considered sacrosanct and Republicans are relying on the faithful to back them in the November elections.

Though many organizations are still unaware of the tax, more than 600 churches and other groups have already signed a petition demanding it be repealed.

Newsweek, Donald Trump's Tax Plan Could Have Churches Paying Thousands of Dollars More

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How many priests and ministers are paid more than a million?

Posted by: Champ | Jun 27, 2018 7:08:20 AM

Tax hikes on churches came at the same time as massive tax cuts for corporations. In case anyone was wondering who is in the drivers seat in the unholy alliance between god and mammon that constitutes so much of U.S. christianity, the answer is clear that he who has the gold still makes the rules.

Posted by: separation of church and state | Jul 2, 2018 8:05:47 AM

I think there are two different provisions: 1) A tax on salaries over a million dollars, and 2) a tax on fringe benefits, no matter the total compensation.

Posted by: brad | Jul 2, 2018 4:35:22 PM