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To amend the Internal Revenue Code of 1986 to increase the rate of the excise tax based on investment income of private colleges and universities and to broaden the definition of applicable educational institution by lowering the threshold with respect to aggregate fair market value per student, and for other purposes.
Summary
This bill increases the federal excise tax on investment income of private colleges and universities from 1.4 percent to 10 percent. It also lowers the threshold for which schools are subject to the tax, changing the definition of "applicable educational institution" to include schools with $200,000 or more in assets per student, down from the current $500,000 threshold. Together, these changes expand the number of colleges and universities subject to the tax and significantly increase the tax rate owed on their investment income. The changes take effect for taxable years beginning after the bill's enactment.
AI-generated plain-language summary of the bill text — neutral, and may be imperfect. See the full text below for the exact wording.
Sponsor (1)
Actions (2)
- Feb 7, 2025 Referred to the House Committee on Ways and Means. · house
- Feb 7, 2025 Introduced in House
Similar bills (6)
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Text versions (1)
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Full text
IN THE HOUSE OF REPRESENTATIVES
February 7, 2025
Mr. Lawler introduced the following bill; which was referred to the Committee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to increase the rate of the excise tax based on investment income of private colleges and universities and to broaden the definition of applicable educational institution by lowering the threshold with respect to aggregate fair market value per student, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the “Endowment Accountability Act”.
SEC. 2. EXCISE TAX BASED ON INVESTMENT INCOME OF PRIVATE COLLEGES AND UNIVERSITIES.
(a) Increase in Rate of Tax.—Section 4968(a) of the Internal Revenue Code of 1986 is amended by striking “1.4 percent” and inserting “10 percent”.
(b) Lowering Asset Per Student Threshold for Definition of Applicable Educational Institution.—Section 4968(b)(1)(D) of such Code is amended by striking “$500,000” and inserting “$200,000”.
(c) Effective Date.—The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act. <all>
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