A 63-year-old federal law that limits political activity by nonprofits, known as the Johnson Amendment, will remain intact as Republican lawmakers move closer to a comprehensive overhaul of the tax code.
A provision included in the House version of the tax legislation that would have loosened the rule was blocked from the final version of the bill, Sen. Ron Wyden, a Democrat from Oregon, told The Wall Street Journal. The decision to omit the House provision was forced by congressional rules that bar provisions that aren’t primarily fiscal in nature from being included in certain kinds of fiscal bills.
The news marks a lone bright spot in months of lobbying on the bill for nonprofit leaders. Polling data has repeatedly shown that the vast majority of nonprofit and religious leaders oppose any change to the rule that would allow for overt political activity by tax-exempt organizations. Doing so would drag nonprofits into political partisanship and make them vehicles of opaque political donations, opponents argue.
“We’re relieved that the devastating proposal to politicize charitable nonprofits, houses of worship, and foundations has been removed from the tax bill that will be voted on next week,” Tim Delaney, head of the National Council of Nonprofits, said in an email. The organization helped spearhead an attempt by nonprofits to fight efforts to change the law, including organizing and submitting a letter to Congress signed by thousands of religious and nonprofit leaders in opposition to the proposed change.
Amanda Tyler, executive director of the Baptist Joint Committee for Religious Liberty, described the omission of the provision as a “big win” for tax-exempt organizations and those who rely on them.
“Fortunately, as more Americans learned of the proposal and its likely impact, they raised their voices — calling and writing their representatives and senators, sharing concerns with their neighbors through local and social media,” Ms. Tyler said in a statement.
The Johnson Amendment, named for then-Sen. Lyndon Johnson, bans overt political activity by churches and other nonprofits, including endorsing political candidates and spending nonprofit dollars on political campaigns. Organizations that violate the rule risk losing their tax-exempt status with the Internal Revenue Service, although the Johnson Amendment has seldom been enforced.
The rule has long been the target of a small number of conservative Christian leaders who say pastors have a right to advise members of their congregations on how to vote. On the campaign trail during the 2016 presidential election, candidate Donald Trump said he would do away with the law.
In May, President Trump signed an executive order directing the IRS not to unfairly target religious organizations for political speech, although nonprofit tax experts say the move had no impact on how the law is applied.
