New federal ‘church parking tax’ sparks questions and concerns

By Bobby Ross Jr. | For Religion News Service

Like houses of worship across the U.S., Calvary Church in Santa Ana, Calif., typically hasn’t had to worry about filing a federal tax form.

But an obscure provision in the corporate tax overhaul approved by the Republican-controlled Congress at the end of 2017 may change that.

That provision imposes a 21 percent tax on employee parking benefits provided by thousands of congregations and nonprofits from coast to coast.

To pay that tax, some churches may have to file form 990-T paperwork with the IRS if they provide parking for employees.

“No one is ever excited to pay more taxes, especially on what used to be free parking for our employees, but we will comply with whatever the final guidance is on the new tax,” said Michael Welles, executive pastor of Calvary Church, a Southern California megachurch with 2,200 weekend attendees and a $5.5 million annual budget. “We would rather invest our funds into helping our community.”

Many pastors contacted by Religion News Service said they were unaware of the new tax.

Others said they had reviewed the interim guidance on the tax — contained in a 24-page document issued by the Treasury Department this past December — and determined that the new provision won’t affect their congregation.

“This is not something which causes me concern,” said Patrick Ford, preaching minister for the West Islip Church of Christ on Long Island, N.Y. “Although we have significant parking-related costs for snow removal, we do not have any spaces reserved for staff.”

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Religion News Service is a national wire service whose media partners include The Associated Press, USA Today and the Washington Post.

Author: Bobby Ross Jr.

Bobby Ross Jr. is an award-winning journalist who has reported from all 50 states and 14 countries.