Attorney Dwayne Leslie represents the Seventh-day Adventist world church in Washington, D.C., monitoring legislation and, when necessary, advocating on behalf of the church. Mr. Leslie provides analysis of tax reform legislation currently being considered in the Senate, and explains how church members in the United States can speak out in support of Adventist teachers.
Tax reform is the main topic of discussion these days in Washington, D.C., as lawmakers attempt to provide a historic revision of the United States tax structure. However, a provision in the recently passed House of Representatives tax bill, if ultimately enacted into law, would negatively impact Adventist educators at all levels. The Seventh-day Adventist Church educational system is the second-largest Christian school system in the world and it operates 852 schools and employs 8,174 teachers in North America.
The Tax Cuts and Jobs Act, which recently passed the House 227 to 205, proposes to eliminate an important provision meant to exclude tuition waivers from the taxable income for employees of educational institutions. Currently, Section 117(d) of the Internal Revenue Code allows Adventist educators at all levels to exclude from income qualified tuition reductions they, or their dependents, receive from their employer (or other institutions that accept the denominational subsidy). Should this provision become law, many of our Adventist educators, who often receive below-market wages, would receive an effective net decrease in their take home pay. (It should be noted, however, that those who receive the denominational subsidy but don’t work for an educational institution are currently required to pay tax on this benefit and this would not change under the pending legislation.)
The Senate bill, which passed on December 2, thankfully, does not include this repeal provision. However, the House and Senate still need to reconcile their bills, so there is still a chance this amendment could be added back into the bill.
We have been in touch with many of the other denominations currently operating educational institutions in the United States and they are all equally concerned about the potential impact of this proposed change. We need to make sure that House and Senate legislators hear our concerns as soon as possible.
While the Adventist Church has not taken a position for or against the overall tax bill, we do want to ensure that our educators are not financially disadvantaged under this reform effort.