A recently-rescinded section of the Tax Cuts and Jobs Act of 2017 would have required houses of worship and other nonprofits to pay a 21 percent tax on such employee benefits as parking and transportation. GETTY IMAGES/Special
By Tom Strode and Roy Hayhurst
WASHINGTON (BP) — Two Southern Baptist entity heads have greeted the repeal of a two-year-old tax on churches and other nonprofit organizations with gratitude.
President Trump signed into law Dec. 20 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. The Senate approved the legislation that included the repeal Dec. 19 in a bipartisan, 71-23 roll call. The House of Representatives passed the measure also in bipartisan fashion by a 297-120 vote Dec. 17.
If it had not been repealed, the provision – which took effect Jan. 1, 2018 – would have cost the charitable sector an estimated $1.7 billion in the next decade, according to opponents of the law. It also would have burdened churches and others with accounting and compliances costs not previously required.
Both the Ethics & Religious Liberty Commission (ERLC) and GuideStone Financial Resources had worked since 2018 as members of coalitions seeking to reverse the tax provision.
ERLC President Russell Moore said in a written statement, “This repeal comes as a welcome relief for millions of Americans, lifting this burden from nonprofits and houses of worship around the country. Churches must never again be seen as untapped sources of government revenue.”
Moore thanked House and Senate leaders, as well as other elected officials, who “worked hard on this issue. And I’m glad to see the President formalize this repeal with his signature.”
“In these contentious days, finding a bipartisan area of agreement in Congress is worth celebrating.”
GuideStone – the SBC’s health and financial benefits entity – “expresses its thanks to the President for signing this important legislation, and to members of the House and Senate who prioritized this legislation for the benefit of all Americans,” President O.S. Hawkins said in a written release. “We are thankful the parking tax has been repealed.”
“Churches must never again be seen as untapped sources of government revenue.” ~Russell Moore, ERLC president
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 continued working for repeal as the end of the year 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.”
Two Southern Baptist members of Congress – Sen. James Lankford, R-Okla., and Rep. Mark Walker, R-N.C. – helped lead the effort to repeal the tax 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 House voted 220-183 last December to rescind the tax on nonprofits, but the Senate did not have the votes to approve the measure.
In June of this year, the House Ways and Means Committee approved repeal of the tax.
Tom Strode is Washington bureau chief for Baptist Press. Roy Hayhurst serves as director of denominational and public relations services at GuideStone.