Proposed “Johnson Amendment” repeal would harm 501(c)(3)s
by Linda M. Czipo
Since 1954, tax law has contained a provision prohibiting 501(c)(3) organizations from directly or indirectly attempting to influence the election or defeat of any candidate for public office. This ban, also known as the Johnson Amendment for its sponsor, then-Senator Lyndon B. Johnson, applies not only to churches, but to all 501(c)(3) organizations.
It’s no secret that the slow economic recovery continues to take its toll on the ability of New Jersey’s non-profits to provide essential services for our communities in the face of a stagnant funding environment.
One important way to address the problem is to make it easier for people to give to charity by providing a state-level tax deduction for charitable donations. Several bills now pending in the New Jersey Legislature would allow taxpayers to deduct their charitable gifts from their state income taxes.
A New Jersey charitable deduction would be good for our state’s charities and everyone that relies on them. Here’s why:
Recently, the Star-Ledger ran an opinion column by a prominent Rutgers University faculty member regarding the changing tax policy landscape for tax-exempt organizations and calling for a variety of reforms to address the problems identified by the author.
Presumably, a major impetus (but not the only one) behind this piece is the recent debate surrounding the property tax exemptions of New Jersey’s largest hospitals and universities.
Perhaps I might have been less dismayed by the article had it focused more specifically on the pros and cons of tax exemption for these mega-institutions (or, for that matter, of providing tax incentives to large for-profit corporations for locating within particular municipalities). But as written, the column contains a number of sweeping generalities and misleading and inaccurate statements regarding the entire non-profit community that cannot go unanswered.