House Rejects Bill Targeting Nonprofits' Tax Status

The U.S. House of Representatives voted against the Stop Terror-Financing and Tax Penalties on American Hostages Act (HR 9495), which sought to grant the Treasury Department authority to revoke the tax-exempt status of nonprofits deemed to support terrorism. The bill failed to achieve the required two-thirds majority, with a final vote of 256-145. Critics, including Rep. Lloyd Doggett, argued that the bill could disproportionately target organizations that criticize U.S. policies, particularly those related to Israel and Palestine, and could be weaponized by future administrations against political opponents. Despite bipartisan support, including 52 Democrats voting in favor, opponents celebrated the bill's failure as a victory for civil society. Advocates expressed concerns that the bill could lead to censorship and a chilling effect on activism. Supporters argued the bill aimed to dismantle financial networks of terrorist organizations, particularly targeting groups like Hamas.