House Passes Bill to Make Some Charitable Tax Deductions Permanent

Nonprofits are applauding the passage of a bill by the U.S. House of Representatives that would make permanent a set of temporary tax "extenders" and simplify the private foundation excise tax to a flat 1 percent rate.

The America Gives More Act (9 pages, PDF), which on Thursday passed in the House by a 279-137 vote, would make permanent charitable deductions for donations made directly from individual retirement accounts, donations of food to foodbanks, and donations of land for conservation purposes, and would expand the deduction for the latter two. The bill also contains a provision to reduce the excise tax that foundations pay on their investment gains to a uniform rate of 1 percent.

"The Council on Foundations commends the United States House of Representatives for its steadfast commitment to helping philanthropic organizations thrive," said COF president Vikki Spruill  in a statement. "The America Gives More Act of 2015 will encourage charitable giving by making permanent several tax policies which have proven successful in increasing community investment. A permanent IRA charitable rollover — which the council has long supported — will give individual donors certainty when planning their charitable gifts and allow more charitable dollars to flow to communities."

"House passage of the America Gives More Act moves us an important step closer to providing certainty through the tax code for charitable and philanthropic organizations as they work to continue providing essential programs and services to those in need," Geoffrey Plague, Independent Sector's vice president for public policy, said in a statement.

As with a similar bill that passed in the House last year but died in the Senate, many Democrats voted against the bill on the grounds that the provisions, which the Congressional Budget Office estimates would reduce tax revenue by $14.2 billion, are not offset by spending cuts elsewhere. The White House issued a veto threat two days before that vote, stating that Republican lawmakers were "seeking to impose a double standard by adding to the deficit to continue and create tax breaks that primarily benefit higher-income individuals, after insisting on offsetting the cost of measures that help middle-class and working Americans, such as the extension of emergency unemployment benefits."

"House Passes America Gives More Act" Council on Foundations Press Release 02/12/2015. "House Passes America Gives More Act of 2015." Independent Sector Statement 02/12/2015.