In the Luumlight

New Year, New Law: UBIT Repealed for Transit & Parking Benefits

After passing through the Senate and executive branch, the Unrelated Business Income Tax (UBIT) on transportation & parking benefits for exempt organizations was permanently repealed on December 20, 2019. 

What does this mean in layman’s speak, exactly? If your organization paid the 21 percent tax on offering parking & transit benefits for employees, you can now file for a refund. Win! 

What’s more, exempt organizations such as universities, hospitals, and others can continue to provide affordable access to transit benefits to millions of employees, and the repeal is retroactive as of January 1, 2018. Double-triple-win! 

For example, if one of our nonprofit customers offered a $100 transit subsidy prior to the repeal, the organization was taxed an additional 21%, paying $121 for that benefit. Now that same customer can file for a refund for these taxes paid. 

Big thanks to the Association for Commuter Transportation (ACT) for its diligent work in making this TDM dream a reality. ACT held more than 75 public meetings with Members of Congress and officials from the US Treasury to encourage repeal of the language. 

We can’t wait to witness the positive effect this change has on providing accessible transit options for employees of nonprofit organizations nationally.