Tax on excess expenditures to influence legislation

There is hereby imposed on the excess lobbying expenditures of any organization to which this section applies a tax equal to 25 percent of the amount of the excess lobbying expenditures for the taxable year. This section applies to any organization with respect to which an election under section 501(h) (relating to lobbying expenditures by public charities) is in effect for the taxable year. For purposes of this section, the term “excess lobbying expenditures” means, for a taxable year, the greater of— For purposes of this section— The term “lobbying expenditures” means expenditures for the purpose of influencing legislation (as defined in subsection (d)). The lobbying nontaxable amount for any organization for any taxable year is the lesser of (A) $1,000,000 or (B) the amount determined under the following table: If the exempt purpose expenditures are—The lobbying nontaxable amount is— Not over $500,00020 percent of the exempt purpose expenditures. Over $500,000 but not over $1,000,000$100,000, plus 15 percent of the excess of the exempt purpose expenditures over $500,000. Over $1,000,000 but not over $1,500,000$175,000 plus 10 percent of the excess of the exempt purpose expenditures over $1,000,000. Over $1,500,000$225,000 plus 5 percent of the excess of the exempt purpose expenditures over $1,500,000. The term “grass roots expenditures” means expenditures for the purpose of influencing legislation (as defined in subsection (d) without regard to paragraph (1)(B) thereof). The grass roots nontaxable amount for any organization for any taxable year is 25 percent of the lobbying nontaxable amount (determined under paragraph (2)) for such organization for such taxable year. Except as otherwise provided in paragraph (2), for purposes of this section, the term “influencing legislation” means— For purposes of this section, the term “influencing legislation”, with respect to an organization, does not include— any communication with a governmental official or employee, other than— For purposes of this section— The term “exempt purpose expenditures” means, with respect to any organization for any taxable year, the total of the amounts paid or incurred by such organization to accomplish purposes described in section 170(c)(2)(B) (relating to religious, charitable, educational, etc., purposes). The term “exempt purpose expenditures” includes— The term “exempt purpose expenditures” does not include amounts paid or incurred to or for— The term “legislation” includes action with respect to Acts, bills, resolutions, or similar items by the Congress, any State legislature, any local council, or similar governing body, or by the public in a referendum, initiative, constitutional amendment, or similar procedure. The term “action” is limited to the introduction, amendment, enactment, defeat, or repeal of Acts, bills, resolutions, or similar items. In computing expenditures paid or incurred for the purpose of influencing legislation (within the meaning of subsection (b)(1) or (b)(2)) or exempt purpose expenditures (as defined in paragraph (1)), amounts properly chargeable to capital account shall not be taken into account. There shall be taken into account a reasonable allowance for exhaustion, wear and tear, obsolescence, or amortization. Such allowance shall be computed only on the basis of the straight-line method of depreciation. For purposes of this section, a determination of whether an amount is properly chargeable to capital account shall be made on the basis of the principles that apply under subtitle A to amounts which are paid or incurred in a trade or business. Except as otherwise provided in paragraph (4), if for a taxable year two or more organizations described in section 501(c)(3) are members of an affiliated group of organizations as defined in paragraph (2), and an election under section 501(h) is effective for at least one such organization for such year, then— For purposes of paragraph (1), two organizations are members of an affiliated group of organizations but only if— the governing board of one such organization includes persons who— If members of an affiliated group of organizations have different taxable years, their expenditures shall be computed for purposes of this section in a manner to be prescribed by regulations promulgated by the Secretary. If two or more organizations are members of an affiliated group of organizations (as defined in paragraph (2) without regard to subparagraph (B) thereof), no two members of such affiliated group are affiliated (as defined in paragraph (2) without regard to subparagraph (A) thereof), and the governing instrument of no such organization requires it to be bound by decisions of any of the other such organizations on legislative issues other than as to action with respect to Acts, bills, resolutions, or similar items by the Congress, then—