Overview
Chairman Brady Offers Additional Amendment to House Bill
Today, House Ways and Means Chairman Kevin Brady (R-TX) offered another chairman’s amendment to the Tax Cuts and Jobs Act as part of the “mark up” of the House’s tax reform bill. The committee approved the amendment 24-16 in a roll call vote. In addition, the House bill, as amended, was favorably reported out of the committee on a 24-16 vote. The amendment has a number of provisions that would affect exempt organizations, including:
- The 1.4% excise tax on certain private college and university endowments is expanded to cover the assets and net investment income of related organizations that control, are controlled by, are under common control with, or are supported or supporting organizations of, the private colleges and universities.
- Under the original House bill, churches would be permitted to make statements relating to political candidates in the ordinary course of religious services and activities, provided the church incurs only de minimis incremental expenses. The amendment expands this provision to apply to all section 501(c)(3) organizations making statements relating to political candidates in the ordinary course of the organization’s performance of its exempt purposes, provided the organization incurs only de minimis incremental expenses. However, the amendment would only apply after the end of 2018 and before the end of 2023. Current law would continue to apply after 2023 and during the period between the bill’s passage and the end of 2018.
- The original House bill would have repealed the rules for deferred compensation for tax-exempt organization employees under sections 457(f), 457(b), and 457A with respect to services performed after December 31, 2017. The amendment strikes this repeal from the bill.
Senate Releases Tax Reform Bill Concepts
Following the conclusion of the House Way and Means Committee markup, the Senate Finance Committee released a conceptual framework for its tax reform proposal. The committee is anticipated to begin a markup of the bill next week. The Senate bill would retain the charitable contribution deduction but, like the House bill, would increase the standard deduction, thereby reducing the percentage of taxpayers that itemize deductions and benefit from the charitable contribution deduction.