Reconciliation bill heads to House after passage by Senate, no specific exempt organization items

U.S. Senate on August 7, 2022, passed budget reconciliation legislation (H.R. 5376)

U.S. Senate on August 7, 2022, passed budget reconciliation legislation (H.R. 5376)

The U.S. Senate on August 7, 2022, passed budget reconciliation legislation (H.R. 5376) that includes significant tax law changes.

The bill does not include provisions specifically focused on charities or charitable giving. There are measures throughout the bill that could in some ways affect exempt organizations. For instance, one provision originally included in the bill concerns a book minimum tax on corporations with average annual adjusted financial statement income of more than $1 billion.  For tax-exempt corporations, only unrelated business income would be taken into account for purposes of the $1 billion threshold. During the Senate consideration of the bill, there was a significant narrowing of the scope of the proposed corporate alternative minimum tax (both through updated text and through a floor amendment).

For an overview of tax provisions included in the bill as passed by the Senate, read TaxNewsFlash.

What’s next?

With Senate passage, the bill now goes to the House of Representatives, which is expected to take up the bill on Friday, August 12, 2022. If the House were to approve the Senate-passed bill with no modifications, the legislation then would be sent to President Biden for his expected signature.

In the seemingly unlikely event the House were to approve a bill that was modified in any way from the bill passed by the Senate, then any differences would need to be resolved, and both the House and Senate would need to pass identical versions of the legislation before it could be transmitted to the president.  

KPMG observation

The House of Representatives passed the “Build Back Better Act” in November 2021—a bill that included provisions that would directly affect tax-exempt organizations. Read TaxNewsFlashThe version of the bill passed yesterday by the Senate does not include those specific exempt organization proposals.


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

Ruth Madrigal | ruthmadrigal@kpmg.com

Preston Quesenberry | 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 3712, 1801 K Street NW, Washington, DC 20006.