No tax relief for churches; Congress ignores latest request on filing returns

EDITOR’S NOTE–This story was updated April 10 to clarify that most churches will NOT have to file tax returns. The only churches affected by this provision in the tax law are those that offer employee transportation fringe benefits such as parking or transportation fees. To read more about the provision, visit https://www.churchlawandtax.com/web/2018/december/how-to-calculate-your-church-parking-lot-tax.html 

Congress has failed, to this point, to heed the latest urgent request from a coalition led by the Southern Baptist Ethics & Religious Liberty Commission (ERLC) to rescind a provision in federal law requiring some churches to file tax returns for the first time in American history.

Sen. James Lankford of Oklahoma and Rep. Mark Walker of North Carolina are among members of Congress seeking to halt a measure requiring some churches to file tax returns if they offer certain benefits to employees.

Specifically, the provision requires houses of worship and other nonprofits to pay a 21 percent tax on employee benefits such as parking and transportation. The measure, which took effect Jan. 1, 2018, will cost the charitable sector an estimated $1.7 billion over 10 years. 

In November the ERLC led a 33-member coalition that urged congressional leaders to repeal the section before the end of the year, but the effort fell short. The House voted 220–183 in December to reverse the provision, but the Senate did not have the votes to approve the measure. (BP)