Tax bill with AHA-supported change clears committee

The House Ways and Means Committee today passed the Economic Mobility Act (H.R. 3300), tax legislation that includes an AHA-supported provision to repeal a costly tax code change in how non-profit employers such as hospitals must account for transportation and parking fringe benefits for employees. The Tax Cuts and Jobs Act of 2017 made amounts paid or incurred for qualified transportation fringe benefits and parking facilities used in connection with qualified parking provided to employees taxable as unrelated business income for non-profit hospitals, and denied a deduction for these same amounts for for-profit taxable hospitals. The changes have been costly for both nonprofit and for-profit hospitals, particularly in urban areas where employers are required by law to offer tax-free public transportation benefits to their employees. Section 401 of the bill would repeal the TCJA change for tax-exempt organizations, including nonprofit hospitals, “an important step in relieving hospitals of a costly and administratively burdensome tax,” AHA told Committee Chairman Richard Neal, D-Mass., in a letter of support for the provision.