"The Tax Cuts and Jobs Act"
The House Version of the Bill:
The House bill would allow endorsement activity to permeate throughout tax-exempt organizations, transforming them from charitable organizations to tax-exempt partisan campaign organizations.
Section 5201 of the bill would allow all tax-exempt organizations—including houses of worship, foundations, and charitable nonprofits—to make statements endorsing or opposing candidates for public office so long as those statements are made in the “ordinary course” of carrying out their tax-exempt purpose and do not incur more than “de minimis incremental expenses.” Although this might sound like a narrow exemption to current law, it is actually so broad, it makes the Johnson Amendment nearly meaningless.
For example, while preaching to his congregation, a pastor could endorse one or more candidates and then the church could post a video of that sermon on its website, email it to parishioners, and distribute it publicly on social media. In addition, the president of major university could insert an endorsement into its weekly newsletter that is emailed to current students and its massive alumni network.
Changing the law would create a substantial loophole in campaign finance law that could be exploited by those seeking to influence elections. It would allow people to escape transparency rules and get tax-deductions for donations that will be used to influence elections.
Changing the law could turn tax-exempt organizations into tools of candidates and political campaigns. It would also lead to divisions within houses of worship and charitable organizations, as members, donors, and those they serve become split along party lines.
House Leadership introduced their proposal on November 2, 2017, and the House Ways and Means Committee took up the bill days later, on November 6. The original bill would have allowed houses of worship (but not other tax-exempt organizations) to endorse candidates. During the committee markup, Rep. John Lewis offered an amendment to strip Section 5201 from the bill and return the Johnson Amendment to its full effect. The vote failed with a vote of 16-23. Then, as the markup was wrapping up, Rep. Kevin Brady (R-TX) offered a 30-page amendment. It included language that expanded Section 5201 to all tax-exempt organizations. The amendment was adopted on a party line vote. The House passed its bill on November 16, 2017.
The Senate Version of the Bill:
The Senate bill did not include language to repeal or weaken the Johnson Amendment.
The Final Bill:
Because the Senate and House bills differed, the two chambers had to work to merge the bills into one final bill. On Thursday, December 14, Senator Ron Wyden's (D-Ore.) office confirmed that the Johnson Amendment language would not be in the final bill. The bill passed by both the House and Senate and signed into law does not contain any language affecting the Johnson Amendment.
Watch the House COmmittee Debate:
“The Retirement, Savings, and Other Tax Relief Act of 2018”
The House Version of the Bill:
Section 507 of the bill would allow all tax-exempt organizations—including houses of worship, foundations, and charitable nonprofits—to make statements endorsing or opposing candidates for public office so long as those statements are made in the “ordinary course” of carrying out their tax-exempt purpose and do not incur more than “de minimis incremental expenses.” Although this might sound like a narrow exemption to current law, it is actually so broad, it makes the Johnson Amendment nearly meaningless.
