Senate Tax Bill Preserves the Ability of the Private Sector to Address Community Needs While Bolstering America’s Workforce

Chairman Mike Crapo (R-Idaho) and the Senate Finance Committee recently released their section of reconciliation legislation extending tax relief in the Tax Cuts and Jobs Act of 2017 and enacting many of the President’s domestic policy priorities.

This draft text takes critical steps towards protecting the ability of nonprofit organizations to continue to lead in addressing the needs of communities across the country.

American society operates on the fundamental ideal that neighbors and communities look out for each other by contributing private resources for the public good. Nonprofit organizations – including associations, professional societies, and charities – operate in the private sector to deliver services that help people meet their basic needs and ensure they are well equipped to succeed in today’s economy.

Preserving the current tax treatment of nonprofit organizations ensures the private sector is well positioned to step up as Congressional leaders seek to reduce the size and scope of government in other areas.

Specifically, the American Society of Association Executives (ASAE) appreciates the Senate’s leadership in removing a provision that would have applied a tax to the amount nonprofit organizations spend on parking and transportation fringe benefits. Instead of diverting resources to a new tax, nonprofit organizations will be able to drive that revenue towards that mission and continue to offer competitive employment benefits.

Additionally, this legislation provides Americans with new tools to access the skills and knowledge they need to be successful in today’s economy.

The Senate Finance text includes the Freedom to Invest in Tomorrow’s Workforce Act, legislation that expands the use of 529 plans to cover postsecondary training and credentialing, such as licenses and nongovernmental certifications. This provision transforms these college savings plans into career savings plans and creates more viable pathways to career success outside the traditional four-year college route.

ASAE applauds the approach of the Senate Finance Committee in these two critical areas. We urge Congress to finalize legislation that reflects the wise choices presented by Senate Finance in their draft text.