Still No Clear Answers on Tax on Qualified Transportation Fringes for Nonprofits

Johnson Lambert joined members of the American Society of Association Executives on Wednesday to meet with officials from the Treasury Department to voice concerns over the implementation of the tax on qualified transportation fringe benefits offered by tax-exempt employers created by the Tax Cuts and Jobs Act of 2017.

Representatives from several ASAE member organizations voiced concern over the uncertainty surrounding the inclusion of employee-elective deferrals, the burdensome impact this provision will have on smaller organizations, and the fact that several jurisdictions require employers to provide these benefits, leaving organizations in those locations with no option at all to lessen the impact of this tax on their operations.

Treasury Department Attorney-Advisor Stephen LaGarde listened to these concerns, but was unfortunately unable to provide any additional specific guidance at this time, nor offer any insight into when additional guidance will be issued. He requested that the tax-exempt community continue to share the implementation challenges being faced to help them better understand the resulting unintended consequences. The meeting was concluded with the understanding they would continue to work with ASAE and the tax-exempt community on these concerns. Acting IRS Commissioner David Kautter told lawmakers earlier this month that fully implementing guidance related to the Tax Cuts and Jobs Act will take “a couple of years, at least.”

For more information about the tax on qualified transportation fringe benefits, see our earlier post about the initial provision and our updated post about the IRS’s interpretation regarding employee-elective benefits.

If you have questions about the impact of tax reform on your organization, please contact us.

J. Calvin Marks
J. Calvin Marks | Senior Manager