“To amend the Internal Revenue Code of 1986 to impose an excise tax on certain investments of private colleges and universities.”
No CRS summary available for this bill.
This section establishes an excise tax regime on specified investments of certain private colleges and universities by adding new IRC §4969 to subchapter H of chapter 42. Specifically, it imposes (1) a 50% tax on the fair market value (principal amount, in the case of debt) of listed investments acquired directly or indirectly (including through pooled funds such as regulated investment companies or exchange-traded funds) during the taxable year; and (2) a 100% tax on net income (including gains net of losses and allocable deductions) from 1-year listed investments (i.e., listed investments held throughout the prior year). Listed investments include any stock, equity or profits interest, debt, or related derivative or contract in a person on the Commerce Department's Entity List, Military End User List, or Unverified List, or the FCC's Covered List of equipment and services (i.e., national security-related restrictions, such as on certain foreign technology firms); the Treasury Secretary must establish and maintain a consolidated listed persons list within 60 days of enactment and allow certifications for pooled funds without such investments. Specified educational institutions include eligible postsecondary institutions (per IRC §25A(f)(2)) that are not state colleges or universities and hold over $1 billion in non-exempt-purpose assets at year-end (including certain related organizations' assets), thus targeting large private endowments subject to the existing net investment income tax (IRC §4968). The provision applies to taxable years ending after the earlier of the end of the first calendar year beginning after enactment or the end of the 1-year period beginning on the date the Treasury Secretary establishes the listed persons list; it includes clerical amendments and authorizes regulations.