Paul L. Caron

Thursday, July 26, 2018

A Tax on Free Campus Parking?

Inside Higher Ed, A Tax on Free Campus Parking?:

If you park at no charge in the university lot in front of your campus office, you might be sticking your employer with a tax bill without even knowing it.

Or maybe you ride public transportation to work at an urban college. You purchase your metro pass using money from your paycheck that's routed to a pretax account instead of your taxed paycheck. You also might be unknowingly leaving your employer holding a new tax bill.

Colleges and universities are facing possible new tax bills like these, plus a dizzying number of questions about how and when they should be calculated, in the wake of the Republican tax-reform package signed into law at the end of last year. Even seven months after President Trump etched his signature onto the bill, institutions have little guidance on what, specifically, they will be paying.

The uncertainty was clear Sunday at the National Association of College and University Business Officers annual meeting. A tax update session seemed to raise more questions than answers about a host of issues, including unrelated business income taxes on employee parking, transit benefits and the sections of the new tax code covering them.

Experts made clear that colleges aren't blaming employees for tax law changes they couldn't control. Still, they warned that under some interpretations, universities might have to pay taxes on employee parking benefits even if they don't charge anyone to park in lots at all. They worry the law will be interpreted to say that employers have to pay taxes on the amount they spend to maintain one of their parking lots where they reserve spaces for employees -- like money paid to pave or plow. ...

The issue of taxing nonprofit employees' parking benefits has received some attention recently after Politico reported in June that churches and other nonprofits would have to begin paying a 21 percent tax on such fringe benefits under the new tax law. Republicans used the new law to restrict fringe benefits that for-profit companies have used for tax deductions. Reasoning that they wanted to treat nonprofits equally but are unable to remove deductions for employers that already pay no tax, they added the new tax on certain employee benefits.

Legal Education, Tax | Permalink


where you getting free parking? unless you are an administrator.

Posted by: mike | Jul 27, 2018 4:39:00 AM

Besides, the loss of the parking or mass transit subsidy tax deduction for employers has been the subject of many an article since the TCJA passed last December. No excuse for being "unknowing" about it. Maybe unhappy.

Posted by: ruralcounsel | Jul 30, 2018 11:00:32 AM