H.R. 1432 (ENR) – VSO Equal Tax Treatment Act
Introduced: December 6, 2024
Sponsor: Rep. Suzanne Bonamici (D-OR)
Status: Referred to the House Committee on Veterans’ Affairs
Summary:
H.R. 1432, the “VSO Equal Tax Treatment Act,” seeks to amend the Internal Revenue Code to treat donations to certain veterans service organizations (VSOs) as deductible charitable contributions for federal income tax purposes.
Background:
Currently, donations to most VSOs are not considered charitable contributions under the Internal Revenue Code. This is because VSOs are classified as “social welfare organizations,” which are not eligible for the same tax treatment as charities. As a result, individuals who donate to VSOs are unable to deduct their donations from their taxable income.
Provisions:
H.R. 1432 would add certain VSOs to the definition of “charitable organization” in the Internal Revenue Code. This would allow individuals to deduct donations to these VSOs from their taxable income, subject to certain limitations.
The VSOs eligible for this treatment would be those that meet the following criteria:
- They are organized and operated exclusively for the benefit of veterans.
- They provide direct services to veterans, such as healthcare, housing, or job training.
- They have been recognized by the Department of Veterans Affairs.
Potential Impact:
The VSO Equal Tax Treatment Act would provide tax relief to individuals who donate to VSOs. It is estimated that the bill would reduce federal tax revenues by approximately $20 million over the next decade.
Proponents of the bill argue that it would encourage charitable giving to VSOs, allowing them to provide more services to veterans. They also argue that it would treat VSOs more fairly, as they provide similar services to other organizations that are eligible for tax-deductible donations.
Opponents of the bill argue that it would create a new tax loophole and reduce government revenue. They also argue that it could lead to increased administrative costs for the Internal Revenue Service.
Next Steps:
H.R. 1432 has been referred to the House Committee on Veterans’ Affairs. It is unclear when the committee will consider the bill or whether it will be passed by the House.
H.R. 1432 (ENR) – VSO Equal Tax Treatment Act
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