Important Year-End Federal Legislative Action that Supports Nonprofits
Congress Repeals Tax on Nonprofit Transportation Benefits!

On Tuesday, the U.S. House of Representatives approved legislation to repeal the tax on nonprofit parking and transportation expenses as part of the tax and spending package. The U.S. Senate approved the bill yesterday, and President Donald Trump is expected to sign it into law today. NAO, the National Council of Nonprofits, Independent Sector and state associations across the U.S. have been advocating for Congress to repeal this confusing and problematic tax on nonprofits since it was first enacted two years ago as part of the Tax Cuts and Jobs Act. The repeal was included in a tax package that was part of one of the two spending bills that Congress passed this week. In recognition that this tax (which was codified as Section 512(a)(7) of the Internal Revenue Code) was bad policy, Congress repealed it  retroactive to its enactment . Nonprofits that paid unrelated business income tax on their parking and transportation benefits in 2018 and/or 2019 should be able to get a refund from the Internal Revenue Service; we will let you know once the IRS provides guidance on how to seek this refund. Thanks to the many nonprofits who tweeted and called their members of Congress about this problematic provision. 
 
The tax provisions in the bill include several other items of interest to nonprofits, including:
 
  1. A replacement of the current two-tier private foundation excise tax with a single rate of 1.39%. This language comes from the Private Foundation Excise Tax Simplification Act (H.R. 4953), a bill recently introduced by Congressman George Holding (R-NC) and supported by the Council on Foundations and other foundation-serving organizations.
  2. An extension of the tax credit for employers offering paid family leave through December 31, 2020. This credit, which was set to expire this month, is not available to nonprofit employers. A separate bill (H.R. 3323) that is pending in the House would extend this tax credit to tax-exempt nonprofit employers.
  3. The extension of several disaster tax relief provisions, including lifting the adjusted gross income cap for tax-deductible charitable contributions going to disaster relief, to recent natural disasters. The disaster tax relief provisions are virtually identical to those that Congress typically approves after natural disasters but did not include recommendations supported by NAO, the National Council of Nonprofits and others for provisions that would help nonprofits engaged in disaster relief and recovery work.
Federal Budget Agreement Includes Investment in Many Programs Important to Nonprofits

The tax provisions were part of two massive appropriations bills that passed the U.S. House and Senate this week. These bills combined elements of 12 other spending bills and provide $1.4 trillion in funding for the federal government for the remainder of the current fiscal year (through September 30, 2020). One of the bil ls ( H.R. 1158 ) provides funding for the Departments of Commerce, Defense, Homeland Security, Justice, Treasury, and general government operations, while the other bill ( H.R. 1865 ) provides funding for other federal government departments. Many of the provisions in the bills provide support for programs that are  important to the work of nonprofits . Among many other things, the appropriations bills include:
  • $7.56 billion in funding for the 2020 U.S. Census, which was $1.4 billion more than President Trump requested. This increased funding is important to ensure a complete, fair, and accurate count in the Census.
  • Preservation of six-day delivery by the U.S. Postal Service.
  • Increased investment in public and preventative health through $8 billion in funding for the Centers for Disease Control and Prevention, which is $636 million more than current spending levels and $1.4 billion more than the President requested.
  • More federal support for early childhood programs with $5.8 billion in funding for the Child Care and Development Block Grant and $10.6 billion in funding for Head Start (both an increase of $550 million over current spending levels).
  • $1.1 billion for the Corporation for National and Community Service, which the President had proposed eliminating. This investment is $21 million above current spending levels and includes a significant increase in support for the Senior Corps program.
  • Investment of $640 million in the expansion of rural broadband service.
  • Full funding for the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) and the Supplemental Nutrition Assistance Program (SNAP) for the current fiscal year and provisions that ensure that SNAP benefits will remain available for the next three years, even in the event of a government shutdown.
  • Support for arts and cultural programs through $162.5 million in funding for the National Endowment for the Arts and the National Endowment for the Humanities, an increase of $7.25 million over current spending levels. President Trump had proposed eliminating both programs.
  • Increased investment in housing needs through $49.1 billion in funding for the U.S. Department of Housing and Urban Development (HUD), an increase in $4.9 billion over current spending levels and $12.4 billion more than the President requested. The HUD funding includes $3.4 billion in support for Community Development Block Grants (an increase of $100 million from current funding levels), which President Trump had proposed eliminating.
"Infrastructure and housing are pressing issues for communities across Oregon-urban and rural," said Senator Jeff Merkley (D-OR), who serves on the Senate Appropriations Committee. "As our cities and towns in every corner of the state face their biggest housing affordability crises in decades-with rents dramatically outpacing incomes-we must do everything we can to make sure families have the decent homes they deserve. This bill includes needed investments in to address the ongoing housing and homelessness crisis."

"No one should have to choose between paying rent or feeding their family. Yet, working families in Oregon are struggling to pay rent, and many others have been forced to leave their communities or to live on the streets," Senator Ron Wyden (D-OR) said. "We must persist in the fight for affordable housing, and thankfully, this package secures much-needed support for those most vulnerable in communities across our state."
Senate Passes Schatz, Murkowski Bipartisan Resolution to Recognize Vital Role of the 2020 Census

On Wednesday, the Senate voted unanimously to pass a bipartisan census resolution ( S.Con.Res. 31) introduced by U.S. Senators Brian Schatz (D-Hawai'i) and Lisa Murkowski (R-Alaska) to ensure that the 2020 Census is fair and accurate. The resolution encourages individuals, families, and households across the United States to take part in the Census so that all communities can be counted.
 
The Nonprofit Association of Oregon voiced our support of this resolution and was a sign-on partner.
 
"The Census is essential to our democracy, ensuring that every person is counted and receives the representation and services they deserve," said Senator Schatz. "By passing this resolution, the Senate made clear that we are committed to reaching all communities and achieving a full and accurate count in 2020."
 
The 2020 Census is a constitutionally mandated undertaking. The data collected is used to properly allocate seats for the U.S. House of Representatives and state legislatures. It also directs more than $800 billion annually in federal funding to state and local communities. The resolution recognizes the importance and significance of the 2020 Census and encourages all people to participate. It concludes that it is the civic duty of every person to ensure that the 2020 Census is as accurate as possible. The resolution now goes to the House of Representatives for passage.
 
Senators Jeff Merkley (D-Ore.) and Ron Wyden (D-Ore.) both voted yes on the passage of the resolution.
 
Together with NAO, the resolution is supported by a number of organizations across the US including the U.S. Conference of Mayors, the National League of Cities, the National Association of Counties, National the Association of Towns and Townships, the Census Project, NAACP, NALEO Educational Fund, Asian Americans Advancing Justice - AAJC, National Congress of American Indians, Service Employees International Union, National Education Association, Nielsen, Facebook, Twitter, Reddit, and Google.
The above was adapted and from materials provided by the North Carolina Center for Nonprofits, National Council of Nonprofits, and press releases from Senators Merkley, Schatz and Wyden. 
Donate now to support NAO's public policy efforts and our mission to strengthen the collective voice, leadership and capacity of nonprofits to enrich the lives of all Oregonians.