The Tax Cuts and Jobs Act (TCJA) made many changes to the tax code, but one small provision may have an outsized impact for nonprofits across the country including independent schools. In short, the law created a new 21 percent employer tax on certain transportation and parking benefits provided to employees, including reserved employee parking. This means that schools may now owe taxes on their own parking lots and must engage in a complex inquiry to determine the costs associated with the parking lot, the percentage of the lot reserved for employee parking, and potential taxes owed. This law also goes beyond parking to cover other transportation costs. Schools may also owe taxes if they allow their employees to ability to set aside their own pre-tax money to use for transportation expenses. These programs benefit employers and employees and now will subject schools to additional costs and administrative burden.

NAIS is working with other organizations in the nonprofit community to urge Congress to repeal this tax. In order to best advocate for independent schools, we need to understand how this provision is affecting our members in the field. If your school has wrestled with this issue and has any information to share about the complexities of compliance (i.e., you had to spend the time and money to work with a CPA to determine whether you owed any taxes under this law), you learned you needed to file a 990-T for the first time, or you determined you owed 'x' amount of dollars in new taxes this year, it will be helpful in informing NAIS' comments, comments with our coalition partners, and conversations with lawmakers, regulators, and their staffs.


For more information about this tax, please see this NAIS Advisory: https://www.nais.org/media/MemberDocuments/Legal/NAIS_Legal_Advisory_Unrelated_Business_Income_of_Employee_Parking_12-18.pdf 

Thank you for your support and assistance! For more information, please contact NAIS Staff Attorney Whitney Silverman at silverman@nais.org.