The IRS has some good news for electric cooperatives.

The federal tax agency is ready to refund tens of thousands of dollars in parking lot taxes paid by more than a third of the nation’s 900-plus co-ops.

Congress voted in December to repeal the controversial tax on parking lots provided by not-for-profit employers for their workers. The tax, which affected churches and charities as well as co-ops, was created as part of the sweeping Tax Cuts and Jobs Act passed by Congress in 2017. It took effect in 2018, but the repeal is retroactive, allowing co-ops to get their money back for any taxes already paid.

“This unfair tax harmed co-ops and their members,” said NRECA’s Paul Gutierrez, who lobbied for its repeal. “We’re happy that Congress realized that and repealed it.”

Any co-op wishing to claim the refund should file an amended Form 990-T with the IRS, which has posted instructions on its website. The claim must be filed within three years of the time the original form was filed or two years from the time the tax was paid, whichever is later.

Supporters of the parking lot tax said it would discourage employers from providing free parking to their workers, who would then be more likely to use mass transit, helping the environment. But, as co-op leaders were quick to point out, subways and other reliable forms of public transportation are largely nonexistent in rural areas.

Gutierrez said the tax was an attempt to raise new revenue for the government, in part to make up for some of the tax cuts in other parts of the 2017 bill.

The parking lot tax was repealed as part of a big government spending deal that Congress passed just before it adjourned in 2019 for the holidays. That deal also included passage of the RURAL Act, which protected co-ops’ tax-exempt status, and the SECURE Act, which saved co-ops millions in pension insurance payments to the federal government.

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