The House of Representatives is expected to vote on a bill Thursday that would make permanent four charitable giving incentives sought by the nonprofit leaders in the last congressional session. The legislation essentially would be the 2015 version of the America Gives More Act which the House passed in July while a similar bill fell only eight votes shore in December, under suspension of the rules.
The House Ways and Means Committee marked up the four bills last week in a partisan vote, with Democrats voting against, and the bills will be packaged into one for Thursday’s vote as H.R. 644:
- H.R. 637, would allow people age 70 ½ or older to donate up to $100,000 to charity directly from their IRAs without incurring a tax on the withdrawal. This provision expired on Jan. 1. The bill is sponsored by Aaron Schock (R-Ill.) and Danny Davis (D-Ill.).
- H.R. 640, would modify the tax rate for excise tax on the investment income of private foundations from 2 percent to 1 percent in any year in which its distributions for charitable purposes exceeds the average level of its distributions over the preceding five tax years. Private foundations must determine each year whether to calculate a 1 or 2 percent excise tax. The bill would remove the calculations and simplify the excise tax as 1 percent on investment income, regardless of giving levels. It is sponsored by Erik Paulsen (R-Minn.).
- H.R. 641, Conservation Easement Incentive Act of 2015, sponsored by Mike Kelly (R-Pa.), would allow property owners to reduce their taxable income by giving up development rights to property for purposes of preserving natural resources.
- H.R. 644 would permanently extend and expand the charitable deductions for contributions of food inventory and land conservation easements, increasing from 10 to 15 percent of taxpayer aggregate net income the amount of deductible food inventory contributions, which a taxpayer may make in a taxable year, and set forth rules for determining the basis of contributed food for taxpayers other than C corporations, and the fair market value of the food. It is sponsored by Tom Reed (R-N.Y.)
The House likely has more than the 218 votes required for passage, according to David Thompson, vice president of public policy at the National Council of Nonprofits, but the question is whether there are 290 votes to override a potential veto by President Barack Obama. “Democratic leadership is circling the wagons to strengthen the president’s hand and strengthen their hand,” he said, presuming that the White House will issue a veto statement ahead of Thursday.
Steve Taylor, senior vice president of public policy at United Way Worldwide, is confident that the legislation will get at least 275 votes but the question is whether it can get 290 votes – a symbolic number and one that would require a good chunk of Democrats. That super majority would sustain any potential veto by President Barack Obama, who last year threatened a veto of a similar bill.
The 290 level also would be required if the bill comes up during suspension of the rules, which allows only one hour of debate before a vote. The White House has not yet said it would veto this bill, Taylor said, looking to see how things are going.
“This legislation is being moved in the context of larger political dynamics,” he said, and that is whether tax revisions have to be paid for or not. “It’s not an accident that Congress moving tax revisions that have brought bipartisan support,” Taylor said. He added that some Republicans would like to set the precedent of extending expired tax revisions through the charitable provisions, and using that as a precedent to make it easier to move business related provisions.
“From the perspective of nonprofit advocates, we really need to stay out of the politics around this. We have to recognize there’s larger context to our legislation moving,” Taylor said. That’s why some Congressional Democrats are pushing back.
Last year’s version, H.R. 4719 passed in July by a vote of 277-130, with all but one of the 222 Republicans at the time voting in favor with 56 Democrats.
The good news is that this latest legislative package shows there’s bipartisan support, Thompson said. The reality, and the bad news, is that U.S. Senate leaders have said they will not move tax legislation on a piece meal basis, instead working toward bipartisan, comprehensive tax reform.
Thompson said it’s important that Congress has recognized these are bipartisan and noncontroversial issues. “In that regard, it’s a good thing, they’re packaged together to demonstrate these are nonprofits doing work in communities,” he said. “It forces policy makers to recognize nonprofits.”