Capitol Hill Report: Current Tax Reform Efforts Could Negatively Impact Adventist Educators

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. In this edition of the Capitol Hill Report, 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, thankfully, does not include this repeal provision. However, it is currently in markup in the Senate Finance Committee and is still subject to further negotiation and change.

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 Senate Finance Committee members hear our concerns as soon as possible. Democratic members have already announced their opposition to the entire tax bill, so our focus should be on the Republican members. Here are the relevant committee members: Sen. Orrin Hatch (Utah), Sen. Chuck Grassley (Iowa), Sen. Mike Crapo (Idaho), Sen. Pat Roberts (Kansas), Sen. Michael Enzi (Wyoming), Sen. John Cornyn (Texas), Sen. John Thune (South Dakota), Sen. Richard Burr (North Carolina), Sen. Johnny Isakson (Georgia), Sen. Rob Portman (Ohio), Sen. Patrick Toomey (Pennsylvania), Sen. Dean Heller (Nevada), Sen. Tim Scott (South Carolina), and Sen. Bill Cassidy (Louisiana).

If you live in one of these states listed above, please consider contacting your Senator 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.

By Dwayne Leslie, Director of Legislative Affairs, General Conference of Seventh-day Adventists