In our continuing effort to keep Foursquare churches up to date on changes in IRS regulations, we are providing information released by the IRS last month about a controversial parking tax that may apply to your church.

The new law imposes a tax on tax-exempt employers for the cost of free parking provided to employees and independent contractors. The tax applies regardless of whether the nonprofit pays for employee parking. If you provide space for employees and independent contractors to park, you may be subject to this parking tax.

This tax will not apply if you meet both of the following criteria:

  • The church does not have any reserved employee parking.
  • The unreserved parking used by employees or independent contractors is less than 50%

Example: Any Town Foursquare Church has a total of 50 spaces. Five (5) spaces are typically used by employees and independent contractors during the week and worship services. No spaces are reserved for employees or independent contractors.

  • Percentage of spaces used by employees and independent contractors = 5 used by employees / 50 total spaces = 10%
  • The amount used by employees and independent contractors is less than 50%, and there are no reserved spaces. Therefore, the unrelated business income parking tax does not apply.

If you do have reserved parking for employees, your employees use 50% or more of the parking, and/or you pay for transit passes or transportation in a commuter highway vehicle for your employees, please follow this link for pertinent information about this parking tax.

Efforts are being made to repeal this controversial tax, but at this time it is in effect. An update communique will be sent if the parking tax is repealed.

If you have any questions, please contact us at

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