“A bill 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 under new IRC §4969 on investments by specified educational institutions—private eligible educational institutions (i.e., those qualifying under IRC §25A(f)(2)) with over $1 billion in non-exempt-purpose assets at year-end, including related organizations' assets—in "listed investments," defined as equity, debt, or derivatives in persons on the Commerce Department's Entity List, Military End User List, or Unverified List, or the FCC's Covered List of equipment/services under the Secure and Trusted Communications Networks Act. It imposes (1) a 50% tax on the fair market value (principal amount for debt) of listed investments acquired in a taxable year and (2) a 100% tax on net income or gains from 1-year listed investments (held continuously for the prior year), including indirect holdings through pooled funds (with certification procedures available to avoid taxation). The Treasury Secretary must establish a consolidated listed persons list within 60 days of enactment and may issue related regulations; the taxes apply to taxable years ending after the earlier of December 31 of the first calendar year after enactment or one year after the list is established. (Thus, the provision effectively prohibits such institutions from acquiring or holding income-producing investments in these national security-related blacklisted entities.)