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Unrelated Business Income Tax
Reps. Mark Walker (R-NC) and Tom Suozzi (D-NY) introduced a bill March 5th to repeal the unrelated business income tax on certain employee benefits provided by associations and other tax-exempt organizations. The bill is a companion to legislation introduced last week in the U.S. Senate.
The tax on nonprofit fringe benefits, like parking and mass transit assistance, was implemented as part of the 2017 Tax Cuts and Jobs Act. The tax is proving to be a huge burden for the nonprofit community, including churches and small charities that have little or no experience dealing with the IRS and insufficient guidance on how to calculate the value of parking and other benefits provided to their employees.
Multiple bills to repeal the nonprofit benefits tax have been introduced in the 116th Congress, and participants in American Associations Day, ASAE’s legislative fly-in, on March 28-29 will advocate for passing UBIT repeal legislation.
On March 7th, HB 4299 and SB 168 were introduced, reinstating the $12 per hour minimum wage initiated act passed by the Legislature last year before lame-duck changes gutted the proposal.
The original minimum wage petition would have gradually increased the minimum wage from its current $9.25 per hour to $12 per hour by 2022 and tipped workers, who currently make 38 percent of the regular minimum wage, would gradually be brought up to the regular minimum wage by 2024.
The law signed by then-Governor Rick Snyder instead set the minimum wage to reach $12.05 by 2030 with much smaller increases per year and keep tipped workers at 38 percent of the regular minimum wage. Additionally, the bill removes a provision added as part of a 2014 compromise that meant the minimum wage annually would increase according to inflation. If the voter-initiated law had never been enacted, workers likely would have made $12 per hour anyway by 2030 under the 2014 law.
With more than $2 billion in increased taxed and changes to current tax laws, Governor Gretchen Whitmer unveiled her administration’s first budget proposal on March 5th.
Featuring a 45-cent fuel tax increase as the primary funding source for improving road, bridges, and travel infrastructure – reaction around the state and amongst partisan and interest groups has largely been sticker shock and immediate pushback.
Regarding education, the proposal would add $507 million to schools with a total of $14.5 billion to be directed into the School Aid Fund. The state’s General Fund would also see changes – funding for higher education will again be paid for through the General Fund although community colleges will remain financially backed through the School Aid Fund.
Other proposals included in the recommendation were:
Review the full proposal, here.
With one week remaining in the Lame Duck session, the legislature continued to take up action on a number of bills including Michigan school grading systems, the right of the legislature to litigate, citizen-initiated bills, and more. The U.S. House and Senate also passed significant revisions to nonprofit fringe benefits and donor disclosure rules.
Advocacy Corner: January thru Mid-February Round-Up
Michigan’s 100th Legislature, executive branch, and the Michigan Supreme Court have each seen significant movement in shaping the state public policy arena through the first several weeks of 2019. A State of the State Address, a much anticipated release of the 2019 state budget, and more are discussed below in MSAE’s advocacy round-up through Friday, February 22nd.
On November 29, the Michigan Senate took action on three bills which seek to restructure campaign finance laws, state oversight of public elections, and the ability of the Michigan legislature to intervene in court proceedings.
The legislature also approved amendments to citizen-initiated bills which seek to change earned sick-leave and raising the state minimum wage.
Advocacy Corner: Week of March 1, 2019
Updates to the national Unrelated Business Income Tax, another round of Michigan auto insurance reform, state redistricting, and more in MSAE’s advocacy round-up through Friday, March 1st.
April showers bring May flowers – welcome to spring!
American Associations Day, the Unrelated Business Income Tax (UBIT), and a look ahead at the potential future of your association’s membership data as U.S. “big tech” reignites debate of the General Data Protection Regulation (GDPR) in MSAE’s advocacy round-up through Friday, April 5th.
State and local officials made their return to the capitol city this week as we look back at the 2018 Lame Duck session and a brief look ahead at Michigan’s 2019 public policy arena.