Washington Report

Advocacy Updates from Washington D.C.

NAR Seeks Delay on Tax Rule

The National Association of REALTORS®, along with nearly 200 other associations, joined in a letter to the U.S. Department of Treasury and the IRS asking for a one-year delay of a new requirement that makes certain employee fringe benefits subject to tax.

The new requirement was passed as part of last year’s Tax Cuts and Jobs Act and provides that expenditures by tax-exempt organizations on transportation fringe benefits are now subject to an unrelated business income tax (UBIT) of 21 percent. The benefits subject to UBIT for the first time include parking benefits provided to employees by a tax-exempt association, and the requirement is effective starting in 2018.

The letter, written under the auspices of the American Society of Association Executives (ASAE), seeks both the one year delay in the implementation of the new provision and also clear guidance on how it will be applied. Further, the signers of the letter are also requesting a de minimis threshold and an exemption in cases where local law mandates that the benefits be provided.

The letter justifies the requested one-year delay by citing the fact that the new law is already in effect, but affected associations have been given no information on how the value of “free” parking is to be computed in various situations. A de minimis threshold could greatly alleviate some of the administrative burden associated with this new obligation.

Read the Coalition Letter