Sec. 5206. Excise tax based on investment income of private colleges and universities

247 words·~1 min read·/bill/113/hr/1/ih/section-5206

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Chapter 42 is amended by adding at the end the following new subchapter: Sec. 4969. Excise tax based on investment income of private colleges and universities. There is hereby imposed on each applicable educational institution for the taxable year a tax equal to 1 percent of the net investment income of such institution for the taxable year. For purposes of this subchapter— The term applicable educational institution means an eligible educational institution (as defined in section 25A(e)(3))— which is not described in the first sentence of section 511(a)(2)(B) (relating to State colleges and universities), and the aggregate fair market value of the assets of which at the end of the preceding taxable year (other than those assets which are used (or held for use) directly in carrying out the institution’s exempt purpose) is at least $100,000 per student of the institution.

For purposes of paragraph (1)(B), the number of students of an institution shall be based on the daily average number of full-time students attending such institution (with part-time students taken into account on a full-time student equivalent basis). For purposes of this section, net investment income shall be determined under rules similar to the rules of section 4940(c). . The table of subchapters for chapter 42 is amended by adding at the end the following new item: Subchapter H—Excise tax based on investment income of private colleges and universities .

The amendments made by this section shall apply to taxable years beginning after December 31, 2014.