By Lindsay Andrews
On December 20, 2019, the “Taxpayer Certainty and Disaster Tax Relief Act of 2019” legislation was signed into law which includes a provision retroactively repealing Section 512(a)(7) of the “Tax Cuts and Jobs Act”, also known as the “nonprofit parking tax”.
Section 512(a)(7) of the “Tax Cuts and Jobs Act” made tax-exempt organizations liable for unrelated business income tax (“UBIT”) of 21 percent on the value of qualified transportation fringe benefits provided to employees, including parking and public transportation benefits. This tax triggered many tax-exempt organizations that have never had UBIT before to be subject to filing a Form 990-T (for unrelated business income) and to pay income tax for the first time.
Pursuant to the new legislation, the “nonprofit parking tax” was repealed with a retroactive effect to the date of its enactment (as if it never existed). Nonprofits that have paid this tax can file an amended Form 990-T to seek a refund for any taxes paid related to such qualified transportation fringe benefits.