Nonprofit “Parking Lot” Tax Is Repealed

On December 20, 2019, President Trump signed into law an appropriations bill that, among other things, repealed the highly criticized “parking lot tax” enacted as part of The Tax Cuts and Jobs Act of 2017. Effective January 1, 2018, a new section 512(a)(7) of the Internal Revenue Code imposed on nonprofit, tax-exempt employers unrelated business income tax on the cost to provide qualified transportation fringe benefits to employees, including parking and public transit benefits. This law was highly controversial for imposing a tax on an organizational expense rather than revenue. This tax has now been repealed retroactive to its effective date.

Organizations that already paid the tax may file an amended return to obtain a refund of the tax paid.

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