Reconciliation bill heads to House after passage by Senate, no specific exempt organization items

U.S. Senate on August 7, 2022, passed budget reconciliation legislation (H.R. 5376)

U.S. Senate on August 7, 2022, passed budget reconciliation legislation (H.R. 5376)

The U.S. Senate on August 7, 2022, passed budget reconciliation legislation (H.R. 5376) that includes significant tax law changes.

The bill does not include provisions specifically focused on charities or charitable giving. There are measures throughout the bill that could in some ways affect exempt organizations. For instance, one provision originally included in the bill concerns a book minimum tax on corporations with average annual adjusted financial statement income of more than $1 billion.  For tax-exempt corporations, only unrelated business income would be taken into account for purposes of the $1 billion threshold. During the Senate consideration of the bill, there was a significant narrowing of the scope of the proposed corporate alternative minimum tax (both through updated text and through a floor amendment).

For an overview of tax provisions included in the bill as passed by the Senate, read TaxNewsFlash.

What’s next?

With Senate passage, the bill now goes to the House of Representatives, which is expected to take up the bill on Friday, August 12, 2022. If the House were to approve the Senate-passed bill with no modifications, the legislation then would be sent to President Biden for his expected signature.

In the seemingly unlikely event the House were to approve a bill that was modified in any way from the bill passed by the Senate, then any differences would need to be resolved, and both the House and Senate would need to pass identical versions of the legislation before it could be transmitted to the president.  

KPMG observation

The House of Representatives passed the “Build Back Better Act” in November 2021—a bill that included provisions that would directly affect tax-exempt organizations. Read TaxNewsFlashThe version of the bill passed yesterday by the Senate does not include those specific exempt organization proposals.

For more information, contact a tax professional with KPMG’s Washington National Tax practice:

Ruth Madrigal |

Preston Quesenberry |


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