New law protects non-profits from tax hike
8/26/2019, 10:47 p.m.
Illinois non-profits will be spared a tax hike thanks to legislation passed and signed into law on Friday by Gov. Pritzker. The new law - passed under Senate Bill 1257 - decouples Illinois from a new tax on nonprofits that was included in President Trump's 2017 Tax Cuts and Jobs Act. "Across Illinois, nonprofits take care of our seniors, ensure children are safe in the community and support individuals with disabilities," said State Senator Toi Hutchinson, one of the bills sponsor. "Imposing a new tax on these organizations would only risk disrupting vital services that Illinoisans rely upon every day."
The new tax charges nonprofits that provide transportation and parking benefits to their employees, such as transit passes or payments for employee parking costs, by requiring organizations to pay unrelated business income tax (UBIT) on these expenses. By decoupling from this new tax, Illinois joins New York and North Carolina who have recently moved to protect nonprofits as well. "True tax reform does not give wealthy business owners tax breaks at the expense of non-profits taking care of some of our most vulnerable," Hutchinson said. Senate Bill 1257 was signed into law on Friday and takes effect immediately.