NAFCU to Congress: Repealing excise tax the right thing to do
Yesterday, NAFCU wrote to applaud the House Ways and Means Committee for including a provision in the Economic Mobility Act of 2019 that would repeal the 21 percent excise tax imposed on certain not-for-profits for providing certain fringe benefits under the Tax Cuts and Jobs Act (TCJA) ahead of tomorrow’s markup session. Additionally, the association also urged the committee to include in the bill a technical correction to the TCJA that would treat executive compensation contacts at not-for-profits the same as for-profits.
Under the TCJA, for-profit executive compensation contracts that were in effect prior to November 2, 2017 are able to remain exempt from deductibility limits. However, no grandfathering provision was included in the section dealing with not-for-profit executive compensation contracts.
“We do not believe it was the intent of the TCJA to disadvantage the not-for-profit sector vis-à-vis the for-profit sector in such a way, and would urge a fix to the TCJA to provide not-for-profits a similar grandfather clause to what is enjoyed by for-profits,” wrote Thaler.
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