A controversial provision that would have granted the Trump administration expansive powers to revoke the tax-exempt status of nonprofits accused of supporting terrorism was quietly removed from the House GOP’s sprawling budget reconciliation package late Sunday night. The move drew cautious relief from civil rights organizations, which warned the clause—widely dubbed the “nonprofit killer”—could resurface in future drafts.
The provision, modeled on the Stop Terror-Financing and Tax Penalties on American Hostages Act (H.R. 9495), was initially included in the 389-page One Big Beautiful Bill Act, named after former President Donald Trump’s description of the package. The bill itself seeks to extend Trump’s 2017 tax cuts that overwhelmingly benefited corporations and ultra-wealthy households while proposing steep reductions to social safety net programs.
In a 17-16 vote, with four Republicans voting “present,” the House Budget Committee advanced the revised version of the bill without the nonprofit clause. Although it was not immediately clear why the provision was removed, a Democratic aide told The Intercept that “Republican staffers removed it after hearing about it from stakeholders and working with leadership on a solution, but I’m not sure what the solution is.”
Civil liberties groups and nonprofit advocates say the provision represented a direct threat to free speech, due process, and nonprofit advocacy. The original language would have allowed the Treasury Secretary to designate any nonprofit as a “terrorist supporting organization” and revoke its tax-exempt status without clear evidentiary standards or judicial review.
According to Free Press Action, the provision “allows the treasury secretary to accuse any nonprofit of supporting terrorism—and to terminate its tax-exempt status without due process.”
Critics have expressed concern that the measure could be used to silence dissent and retaliate against organizations critical of U.S. foreign policy or supportive of Palestinian rights, especially in the wake of intensified crackdowns on Gaza solidarity protests. The Trump administration has previously taken steps to defund universities and other institutions it deems unfriendly, and the inclusion of the nonprofit killer clause in a tax overhaul raised alarm among civil society watchdogs.
“The removal of the nonprofit killer bill from the House Republicans’ advanced tax package is a promising sign, not a victory,” said Robert S. McCaw, government affairs director for the Council on American-Islamic Relations (CAIR). “This provision could come back at any time, and if Americans want to preserve the right of nonprofits to speak truth to power, now is the time to flood Congress with messages demanding they keep this language out of the bill.”
“We are defending nothing less than the future of nonprofit advocacy and our core constitutional freedoms,” McCaw added.
The American Civil Liberties Union (ACLU) echoed that sentiment. Kia Hamadanchy, senior policy counsel at the ACLU, emphasized that while the provision’s removal is a temporary relief, the broader threat persists. “It’s possible they took it out to rewrite it in some way, because we know that this package is going to be amended,” he told The Intercept. “But for now, it’s not in the text of the bill, and that’s an improvement from where we were at last week.”
The clause’s history reveals repeated attempts to embed it in federal legislation. First introduced in 2023, a previous version of the bill passed the House with bipartisan support but failed to secure a Senate vote before the session ended. The measure reappeared in November 2024 and was added to the final pages of the House GOP tax package last week by the Ways and Means Committee before being pulled in the latest draft.
Opponents of the provision note that its broad and undefined language could grant any administration unprecedented power to politically target charitable organizations, advocacy groups, religious institutions, or even media outlets. This concern is particularly acute among groups focused on civil rights and pro-Palestine advocacy, who say the bill’s vagueness could be exploited to equate criticism of U.S. allies with material support for terrorism.
The digital rights group Fight for the Future, which has long opposed the legislation, credited grassroots action for the temporary victory. On the social media platform Bluesky, the organization wrote, “Pressure from YOU is making a difference. We killed this bill in the fall, but because authoritarians love using censorship to silence opposition, it’s likely gonna keep rearing its head.”
The provision’s removal comes amid broader scrutiny of the One Big Beautiful Bill Act, which also proposes deep cuts to Medicaid, SNAP, and other public assistance programs. Critics argue the legislation prioritizes tax breaks for billionaires and corporations at the expense of vulnerable communities and democratic institutions.
Still, the clause’s exclusion from the latest draft is no guarantee of its permanent defeat. The bill now heads to the House Rules Committee, where it could be amended again before reaching the full chamber. Advocates stress that the fight is far from over.
“We are continuing to track things,” said Hamadanchy. “In case this thing comes back from the dead—as it has numerous times.”
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