On May 23, Senators Chris Dodd (D-CT) and Gordon Smith (R-OR) introduced S. 1466, the Volunteer Responder Incentive Protection Act. The bill would prohibit the federal government from taxing benefits provided to volunteer fire and emergency medical services personnel by local and state units of government. Congressman John Larson (D-CT) introduced H.R. 943, an identical version of the Volunteer Responder Incentive Protection Act, in the House of Representatives on February 8.
“Volunteer firefighters save municipal, county, and state government tax payers more than $37 billion every year,” said National Volunteer Fire Council (NFVC) Chairman Philip C. Stittleburg. “In order to retain and recruit volunteers, many local and state governments across the country provide them with modest benefits. When the federal government taxes these benefits, it diminishes, and in some cases eliminates, the incentive they were designed to create.”
There are a wide range of benefits that can be provided to volunteers including pay-per-call, reimbursement for expenses, tax breaks, and pension-like plans called length of service awards. Many communities provide non-financial benefits like health club memberships or awards banquets that technically are taxable. The purpose of these benefits is to reward volunteer responders for their service and give them an incentive to be a member of their local volunteer department.
The NVFC sent a letter of support, along with the Congressional Fire Services Institute (CFSI), the International Association of Fire Chiefs (IAFC), and the National Association of Towns and Townships (NATaT). In November 2006, the National Advisory Committee of CFSI adopted, without objection, a resolution introduced by the NVFC and the IAFC supporting the Volunteer Responder Incentive Protection Act. The NVFC and NATaT signed a memorandum of understanding in September 2006 to work together on issues of mutual interest.
“I’d like to thank Senators Dodd and Smith for introducing this important legislation,” said Stittleburg. “S. 1466 provides immediate tax relief to hundreds of thousands of volunteer firefighters and EMS personnel. It also creates a tax climate that doesn’t discourage communities from providing their volunteers incentives.”
Gaps in the tax code make taxation of volunteer benefits extremely complicated. Sometimes the sheer amount of paperwork involved in complying with the code makes providing benefits more trouble than it is worth. With passage of S. 1466, the NVFC expects that more communities will see providing incentives as a viable option.
S. 1466 was referred to the Senate Finance Committee. The NVFC urges you to contact your Senators and ask them to cosponsor S. 1466.
More NVFC: nvfc.org