17 December 2019

PRESS RELEASE: Private foundation excise tax simplification, parking/transportation UBIT repeal included in year-end tax bill

WASHINGTON, D.C.— Lawmakers came to an agreement yesterday on a tax bill that includes the simplification of the private foundation excise tax. The provision is from the Private Foundation Excise Tax Simplification Act, H.R. 4953, which is sponsored by Reps. Danny Davis (D-IL) and George Holding (R-NC). The change streamlines the current two-tiered excise tax to a flat rate of 1.39 percent effective the date the bill is signed.

“The current two-tier private foundation excise tax penalizes foundations for making larger grants in one year to assist, for example, with disaster relief. This simplification will immediately benefit critical disaster relief and other programs throughout our communities,” said Sandra Swirski, executive director of the Alliance for Charitable Reform (ACR).

Also included in the tax package was the repeal of the unrelated business income tax (UBIT) imposed on parking and transportation fringe benefits that nonprofits offer to their employees, which was enacted as part of the 2017 Tax Cuts and Jobs Act.

“We applaud lawmakers for making these two important changes priorities, and we urge Congress and President Donald Trump to pass and sign the bill in short order,” said Swirski.