A letter from NPCC sent to the New York Congressional Delegation to Repeal the Internal Revenue Code Section 512(a)(7)

I write on behalf of the nearly 1,600 members of the Nonprofit Coordinating Committee of New York (NPCC), a membership organization for 501(c)(3) nonprofits in and around New York City. NPCC represents nonprofits throughout New York City, Long Island, and Westchester. Our diverse membership includes small and large nonprofits working on issues important to all of our communities, such as human services, education, health, the environment, and more.

NPCC members have expressed grave concerns about subsection 512(a)(7) of the Internal Revenue Code. NPCC and our members urge the immediate repeal of Internal Revenue Code Section 512(a)(7), the new income tax on expenses incurred by nonprofits for providing employee transportation benefits, such as parking and transit passes. This new tax is forcing hundreds of thousands of charitable nonprofits, houses of worship, foundations, and other nonprofits to conduct extensive and costly assessments of their expenses related to parking, subway cards, and bus passes to determine whether and how much in tax payments they must submit to the IRS. Notably, these payments are coming due in a matter of weeks unless Congress acts immediately to repeal the tax. Please see the comments of the National Council of Nonprofits responding to recent rulemaking that explain the many challenges that the tax is imposing on community-based organizations and demonstrate the urgent need for congressional action.

There is bipartisan support for eliminating this unfair tax on organizations dedicated to addressing problems in communities throughout the United States. Last December, the House passed a bill that, among other things, would have repealed the nonprofit transportation tax (see Section 505). Bills in the current 116th Congress, HR 1223 by House Majority Whip Clyburn (D-SC) and HR 513 by Representative Conaway (R-TX), also target Section 512(a)(7) for repeal. Bipartisan opposition in the Senate is equally strong, as evidenced by bills introduced last year and communications with the Treasury Secretary.

Repeal of Section 512(a)(7) is of the utmost urgency. We urge you to do everything in your power to ensure that legislation eliminating this levy passes Congress in the next few weeks, before resources in our state must be unjustly diverted from mission.