The Center has submitted comments requesting that the U.S. Department of Treasury and the Internal Revenue Service delay implementation of the changes to unrelated business income tax from the Tax Cuts and Jobs Act.
Now that the U.S. Senate has passed tax reform plan (see details below), House and Senate leaders are negotiating a final version of the bill that they hope to send to the President for his signature as soon as this Friday. While both the House and Senate plans include a variety of tax changes that are problematic for nonprofits (plus a few small changes that might benefit nonprofits), there is a big difference between the two plans.
The N.C. General Assembly is considering a bill (H.B. 482) that would create new penalties for nonprofits and businesses that improperly classify their workers as independent contractors rather than employees. Nonprofits that misclassify their employees and fail to provide benefits such as workers’ compensation or unemployment insurance benefits could face fines ($1,000 per misclassified worker) and could be barred from state contracts for five years.
The General Assembly is in the final stages of its efforts to restructure North Carolina's tax system. The House and Senate are considering different version of legislation (H.B. 998) to lower tax rates and simplify the state tax system. It is essential that tax reform not harm nonprofits. Specifically:
Based on input we have received from member nonprofits over the past few years, the Center has compiled a list of several state tax law changes that could help nonprofits. These include:
As Congress considers major tax reform in 2017, it is likely to revisit tax incentives for charitable giving. The Center recently sent a letter to all of North Carolina's members of Congress encouraging them to preserve or expand incentives for charitable giving as they contemplate tax reform this year.