After being passed by the House of Representatives, this year’s reconciliation bill (H.R. 1) moved to the Senate, which passed its own version of the legislation today, July 1.  The Senate bill would preserve without significant change many tax-related items from the House bill.  There are several provisions, however, where the Senate bill varies from the version the passed the House earlier.  The Senate-passed legislation will now head back to the House, where its fate is somewhat uncertain.

We previously covered several of the relevant tax provisions when House passed its version of the reconciliation bill.  This article is part of a series of articles examining how those provisions would change under the Senate’s legislation.

As discussed in our previous post, the House version of this bill addressed qualified transportation fringes provided under section 132(f) of the Internal Revenue Code. The House Bill would would treat expenses for such fringes, including public transit benefits, highway van pools, and qualified parking, paid by tax-exempt employers as unrelated business taxable income under section 512, resurrecting an unpopular provision of the Tax Cuts and Jobs Act that had been repealed retroactively in 2020. Likely fearing the outcry from tax exempt organizations and churches that led to the retroactive repeal of the provision following its prior enactment, the Senate version of the reconciliation bill does not include such a provision or propose any other amendments to section 512 of the Code.