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Wall Street Journal Op-ed Targets ASAE,“Nonprofits” in Tax Fight
By Todd McElwee
ASAE’s efforts to protect its sector’s tax-exempt status were targeted in a March 4 Wall Street Journal (WSJ) op-ed. Arguing lawmakers working to offset the cost of extending the Tax Cuts and Jobs Act, could, “raise billions in new revenue by taxing the business income of special interests masquerading as nonprofits,” Scott Hodge, a tax and fiscal policy fellow at Arnold Ventures and President Emeritus of the Tax Foundation, takes aim at ASAE and its efforts via the Community Impact Coalition in “Nonprofits’ Circle the Wagons to Fend Off Taxes.”
He highlights the billions in revenue raised by “nonprofits.”
Chris Vest, CAE, Vice President, Corporate Communications & Public Relations, ASAE, told USAE: “ASAE is working with its Community Impact Coalition to correct misperceptions shared in the Wall Street Journal op-ed but we can’t discuss or elaborate on our strategy at this time.”
He said there will be more to share in the near future.
Hodge shared that ASAE has a $21 million annual budget and pays its CEO about $1 million a year. He added the association is “positioned to invest $1M in strategic advocacy and communications counsel” while also noting general coalition membership runs $5,000 with steering committee membership costing $10,000 and $25,000 earning executive-leadership level status.
“That membership fee isn’t much if your goal is to avoid paying taxes on tens of millions of dollars of businesslike income,” he wrote.
Hodge said IRS data showed 501(c) (6) organizations reported nearly $54 billion in total revenue in 2021 and $3.3 billion in tax-exempt profits after deducting expenses. He discussed what revenue is exempt from tax and what is taxable and shared that ASAE reported $10.4 million in income from hosting meetings, but only $648,526 of that was potentially taxable as unrelated to its mission.
“If ASAE were a for-profit company, all $10.4 million would be subject to tax,” he wrote.
Hodge also shared revenue data from the PGA Tour Inc., which reported $1.8 billion in revenue in 2023 and paid its commissioner $18.8 million that year, U.S. Tennis Association, and other sports outfits stating, “None seem to operate in a nonprofit manner.” He juxtaposed them with the NFL, NBA and Major League Baseball, saying they “gave up their 501(c)(6) status years ago and seem to be thriving as commercial businesses.”
Hodge came back to ASAE reporting it argues that taxing the business income of these organizations somehow impinges on their “ability to exercise their First Amendment rights to freedom of religion and association.”
“How so? The 21% corporate tax rate hasn’t prevented the owners and employees of more than 1.5 million U.S. corporations from assembling, and some business leaders are exercising the Free Exercise rights by praying that President Trump delivers on his pledge to lower the corporate tax rate to 15%,” he wrote.
Find the complete column at wsj.com.
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