The tax rules for parking expenses have changed for taxable and tax-exempt entities.
The U.S. tax law originally named the “Tax Cuts and Jobs Act” (TCJA) made several sweeping changes to both section 274, curtailing many common benefit deductions for taxable entities, and similar provisions for tax-exempt entities, increasing unrelated business taxable income (UBTI) under section 512(a)(7) for qualified parking benefit expenses. In particular, the TCJA reduces or eliminates deductions related to expenses for meals, entertainment, amusement, or recreation activities, and qualified transportation fringe benefits (including parking) for expenses paid or incurred on or after January 1, 2018 (irrespective of the tax year).
The IRS issued Notice 2018-99 as initial guidance on the potential limitations and increased UBTI related to qualified parking expenses.
Read a February 2019 report [PDF 132 KB] prepared by KPMG LLP: What’s News in Tax: Notice 2018-99: Tax Reform Curbs Parking Deductions and Increases UBTI
© 2020 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.KPMG International Cooperative (“KPMG International”) is a Swiss entity.
Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. 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 KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in 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.