Legislative update: Government funding bills include parking tax repeal provision

Parking tax repeal provision

Two appropriations bills that would fund the government for the 2020 fiscal year are pending consideration in the U.S. Senate.

1000

Related content

One of the bills would repeal what is commonly referred to as the “parking tax”—that is, section 512(a)(7), which requires tax-exempt organizations to include in unrelated business taxable income the amounts they pay or incur on qualified transportation fringe benefits.  Section 512(a)(7) was enacted as part of the 2017 tax law (Pub. L. No. 115-97, the law that is often referred to as the “Tax Cuts and Jobs Act” (TCJA)).

The bill states that the measure “shall take effect as if included in the amendments made by section 13703 of Pub. L. No. 115-97” so that the repeal of section 512(a)(7) would apply retroactively to the date of its enactment.

The legislation also includes a provision that would "flatten" the rate of tax on the net investment income of private foundations to 1.39%, replacing the current two-tier tax at rates of either 2% or 1%.

Finally, the legislation includes a provision that would allow mutual or cooperative telephone or electric companies to not take into account as income certain government grants when applying the requirement under section 501(c)(12) that 85% or more of income consists of amounts collected from members.

The U.S. House of Representatives on December 17, 2019, approved the bills.

Read TaxNewsFlash for more information about the bills.

 

For more information, contact a tax professional with KPMG’s Washington National Tax practice:

Ruth Madrigal | +1 202 533 8817 | ruthmadrigal@kpmg.com

Preston Quesenberry | +1 202 533 3985 | pquesenberry@kpmg.com

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us

 

Want to do business with KPMG?

 

loading image Request for proposal