Domestic Taxes

Religious leaders push back on Republicans for new GOP tax law

Greg Nash

Religious leaders are slamming the GOP’s tax-code rewrite for its requirement that churches, synagogues and other nonprofit organizations start paying a tax on some of the fringe benefits offered to their employees.

Politico reported Tuesday that the tax law says the groups must start paying a 21 percent tax on some benefits, including those for transportation, meals and potentially gym memberships.

Republicans eliminated tax breaks for employees’ fringe benefits in the 2017 law, signed by President Trump in December, to cover the cost of tax cuts for corporations and individuals. Because nonprofits don’t pay income taxes, lawmakers implemented a tax on the organizations’ fringe benefits.

Religious institutions, which are exempt from taxes, told Politico that the statute is a significant burden, both financial and administrative, and one that will force them to work with the IRS for the first time. The article noted that many faith-based groups are unaware of the new tax.


“A lot of people are just finding out about it and the more people find out about it, the more pressure there will be on Treasury and Congress to either delay implementation or consider changing this,” said Steven Woolf, senior tax policy counsel for the Jewish Federations of North America, who told the publication that the group would pay $75,000 in taxes this year as a result of the new law.

“There’s going to be huge headaches,” Galen Carey, the vice president of government relations at the National Association of Evangelicals, told Politico. “The cost of compliance, especially for churches that have small staffs or maybe volunteer accountants and bookkeepers — we don’t need this kind of hassle.”

House Ways and Means Committee Chairman Kevin Brady (R-Texas) defended the provision, with a spokesman telling The Hill that it simplifies the tax code for worker compensation.

“The Tax Cuts and Jobs Act included provisions that provided greater parity in the tax treatment of different types of employee compensation,” Rob Damschen said in a statement. “Those provisions apply to both employers that are taxable entities and those that are tax-exempt entities.”

“Providing this greater parity helps to reduce the extent to which decisions about the elements included in an employee compensation package are driven by tax considerations,” he added.

Rep. Mike Conaway (R-Texas) introduced a bill earlier this year to rescind the tax on religious groups.

Tags Donald Trump GOP tax law IRS Kevin Brady Mike Conaway religious institutions
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