WASHINGTON (BP) — Congress appears near the repeal of a tax on churches and other nonprofit organizations that Southern Baptist entities and other opponents began calling for last year.
The House of Representatives voted 297-120 Dec. 17 for a spending bill that includes language rescinding a section of the Tax Cuts and Jobs Act of 2017 that requires houses of worship and other nonprofits to pay a 21 percent tax on such employee benefits as parking and transportation. If not repealed, the highly criticized measure — which took effect Jan. 1, 2018 — would cost the charitable sector an estimated $1.7 billion in the next decade, according to foes of the law. It also would burden churches and others with accounting and compliances costs not previously required.
Negotiators from the House and Senate agreed on the year-end spending bill and the inclusion of the church tax repeal Dec. 16. Voting for the legislation in the House the next day were 218 Democrats and 79 Republicans.
It is anticipated the Senate will vote on the House-approved bill by Dec. 19, and President Trump is expected to sign it into law Dec. 20, according to the Southern Baptist Ethics & Religious Liberty Commission (ERLC).
Russell Moore, the ERLC’s president, expressed gratitude for the House action and said he looks forward “to this burden being lifted from nonprofits around the country.”
“It’s not every day that Congress finds bipartisan areas of agreement,” Moore said in a news release. “This is essential progress in the right direction for an issue with bipartisan and bicameral support. Now it’s time for the Senate to finish the task and end this troublesome tax. Churches must not be seen as untapped sources of government revenue.”
O.S. Hawkins, president of GuideStone Financial Resources, said, “The parking tax was always a bad idea, and we are thankful to see the U.S. House of Representatives act in a bipartisan manner to repeal this part of the tax reform law.
“We will continue to advocate, alongside our Southern Baptist partners, and as part of the Church Alliance, for the U.S. Senate to move swiftly in also passing this repeal,” he said in a news release. “The repeal will benefit the churches, ministries, pastors and others we are privileged to serve.”
GuideStone is the Southern Baptist Convention’s health and financial benefits entity.
The ERLC and other coalition allies sent letters in both November 2018 and March 2019 urging repeal of the tax on churches and other nonprofits. The ERLC has continued working for repeal as the end of the year has neared.
As members of the Church Alliance, GuideStone and other organizations commented publicly against the tax twice in 2018 and once this year, noting their “fundamental opposition to the taxation of churches and church-related ministries.”
The House voted 220-183 last December to reverse the tax on nonprofits, but the Senate did not have the votes to approve the measure.
Two Southern Baptist members of Congress — Sen. James Lankford, R-Okla., and Rep. Mark Walker, R-N.C. — have helped lead the effort to repeal the provision. Lankford reintroduced the Lessening Impediments From Taxes (LIFT) for Charities Act in February of this year, while Walker reintroduced his companion bill in March.
“The fix included in this week’s appropriations bill is a huge win for our nation’s churches, charities, and other nonprofits who are dedicated to serving our neighbors and meeting the needs of our communities,” Lankford said in a written statement. “We should protect our nonprofits, not tax them.”
In a news release, Walker said the repeal of the tax will ensure “the critical work of churches and charities is not restricted by burdensome taxes and fees.”
Tom Strode is Washington bureau chief for Baptist Press.
A few of the resources on this issue:
- Stop the Tax on Houses of Worship [Wall Street Journal op-ed]
- Are churches being taxed? [Explainer]
- ERLC supports technical fix of tax law on church parking taxation [Article]