With the 2018 tax year well underway, ASAE and many other associations are still seeking changes to—or at least guidance on—a handful of provisions in the tax law enacted at the end of last year.

ASAE and a delegation of association representatives met with Treasury Department officials in late April to discuss a provision in the new tax law affecting certain fringe benefits. The provision removes a deduction for employer-provided benefits such as transportation, parking, and on-premises athletic facilities.

While the provision applies to all employers, the new law disproportionately hurts tax-exempt employers by requiring them to pay a new unrelated business income tax (UBIT) on the value of benefits. ASAE contends that this marks the first time UBIT is being assessed on an expenditure instead of income.

In addition, some cities, including Washington, DC, New York, and San Francisco, have mandated that employers provide pretax mass transit benefits, so employers in those cities do not have the option of changing these benefits.

ASAE has also asked Treasury for more guidance on a new requirement that unrelated business income be separately computed for each business activity. This provision was included in the tax law ostensibly to prevent tax-exempt groups from using the loss from one unrelated business activity to offset the income from another unrelated business activity.

Tax-exempt organizations are badly in need of guidance from Treasury on what activities may constitute separate businesses. Given the absence of clarity, groups like ASAE and the American Institute of CPAs have asked Treasury to delay implementation of this provision for one year to give tax-exempt organizations adequate time to comply with the new requirements.