The Government has quietly been working on a new tax law that would affect churches, hospitals, colleges, orchestras and other historically tax-exempt organizations to begin paying a 21% tax on the benefits they provide their employees.
Many of those institutions are now worried about the amount they will have to pay the government. The Jewish Federations of North America is looking at a new $75,000 tax bill this year because of the change. While many organizations are not aware of the tax bill yet, already 600 churches and other groups have already signed a petition demanding it is repealed.
According to Galen Carey, vice president of government relations at the National Association of Evangelicals explained how this would affect these 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, one of the architects of the Tax Cuts and Jobs Act said through a spokesman that this will “simplify the code when it comes to how workers are compensated.”
Mike Batts, chairman of the board of Evangelical Council for Financial Accountability said, “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. It’s absurd.” The Council is circulating the petition denouncing the tax.
“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,” said Batts, who is also managing partner of an accounting firm that specializes in religious nonprofits.
Many of the churches, nonprofits, Universities, and Orchestras want to know how exactly this is going to work. A host of groups are demanding that the tax bill be delayed at least until they understand what it is they are paying.