On December 10th, Governor Cuomo (D-NY) signed legislation that decouples New York State tax law from Federal tax law as it pertains to transportation fringe benefits offered by tax-exempt organizations. Following Tax Cuts and Jobs Act of 2018, tax-exempt organizations are subject to adding the value of parking, and transportation fringe to their unrelated business taxable income (UBTI). This in effect levy’s a 21% Federal tax on employer-provided parking and transit/parking benefits.
New York State is a conforming state, meaning the tax rules for Federal taxes are followed by State tax law unless otherwise changed. As such, if the legislation had not passed, New York State tax-exempt organizations would have not only been subject to the 21% federal tax, but an additional 9% statewide tax.
Below is a link to a story regarding the change: https://www.longisland.com/news/12-10-18/governor-cuomo-signs-legislation-to-protect-non-profits-from-federal-tax-hike.html
