Relief for Not-for-Profits — Repeal of the TCJA’s Parking Tax– December 30, 2019 by Cathleen Lorenz

Congress gave an early Christmas present to tax-exempt organizations that provide parking for their employees. On December 20, 2019, President Trump signed the Further Consolidated Appropriations Act, 2020, repealing Internal Revenue Code Section 512(a)(7) retroactively as if it were never enacted. 

The provision, which implemented a “parking tax” as part of the Tax Cuts and Jobs Act (TCJA) passed in late 2017, was widely unpopular among the not-for-profit community. The provision caused tax-exempt entities to treat the cost of providing parking to their employees as Unrelated Business Taxable Income and to pay federal tax on those benefits.

The retroactive repeal is good news for not-for-profits and provides the opportunity for refunds for parking taxes already paid.

Contact Cathleen Lorenz at clorenz@cohencpa.com or a member of your service team to discuss this topic further.


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