A new tax on churches, synagogues, and other non-profit groups could force those places to pay up to a 21 percent tax.
According to Politico.com, the new tax code would mean churches, hospitals and other groups would have to file returns and pay taxes on some of the benefits they provide for their employees.
Many groups had not even heard of the new tax change, including some lawmakers.
"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 a group that would be impacted by the tax.
More than 600 churches and other groups have started a petition demanding that the new tax be repealed.
“There’s going to be huge headaches,” said Galen Carey, vice president of government relations at the National Association of Evangelicals, a group of evangelical Christian organizations. “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 Chairman Kevin Brady, however, is defending the change, saying it would simplify the tax code.
Under the new tax code, Republicans cut tax breaks for fringe benefits for employees. Those include practices such as entertaining clients or providing meals to employees.
The new tax code treats businesses and nonprofits equally, so those nonprofit organizations also have to pay taxes.
“What we’re talking about is an income tax on the church for providing parking to its employees — that’s what we’re talking about,” said Mike Batts, chairman of the board of the Evangelical Council for Financial Accountability, which is circulating the petition denouncing the tax. “It's absurd.
“The whole idea of tax exemption for nonprofit organizations that are doing charitable, religious and educational work is for them not to be on the same playing field as for-profit businesses when it comes to taxes, in order to incentivize the good work they do to make our society better,” he added.
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Publication date: June 27, 2018