Sec. 8. Excise taxes on certain colleges and universities
1,052 words·~5 min read·
/bill/117/s/4897/is/section-8A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
Subchapter H of chapter 42 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section: There is hereby imposed on each specified applicable educational institution for the taxable year a tax equal to 1 percent of the aggregate fair market value of the assets of the institution at the end of the preceding taxable year. For purposes of this subchapter, the term specified applicable educational institution means any applicable educational institution, other than an institution which is religious in nature, 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 directly in carrying out the institution's exempt purpose) is at least $2,500,000,000.
For purposes of this section— The rules of section 4968(d) shall apply. The rules of section 4968(b)(2) shall apply. . The table of sections for subchapter H of chapter 42 of the Internal Revenue Code of 1986 is amended by adding at the end the following new item: Sec. 4969. Excise tax on certain large private college and university endowments. . Subchapter H of chapter 42 of the Internal Revenue Code of 1986, as amended by subsection (a), is amended by adding at the end the following new section:
There is hereby imposed on the undistributed excess endowment amount of each specified applicable educational institution for the taxable year, which has not been distributed before the first day of the second (or any succeeding) taxable year following such taxable year (if such first day falls within the taxable period), a tax equal to 30 percent of such undistributed excess endowment amount remaining undistributed at the beginning of such second (or succeeding) taxable year.
The tax imposed by this section shall not apply to the undistributed excess endowment amount of a specified applicable educational institution to the extent that the foundation failed to distribute any amount solely because of an incorrect valuation of assets, if— the failure to value the assets properly was not willful and was due to reasonable cause, such amount is distributed as qualifying distributions by the institution during the allowable distribution period, the institution notifies the Secretary that such amount has been distributed as qualifying distributions to correct such failure, and such distribution is treated, by reason of subsection (e)(2), as made out of the undistributed income for the taxable year for which a tax would (except for this paragraph) have been imposed under this subsection.
In any case in which an initial tax is imposed under subsection
(a)on the undistributed excess endowment amount of any specified applicable educational institution for any taxable year, if any portion of such amount remains undistributed at the close of the taxable period, there is hereby imposed a tax equal to 100 percent of the amount remaining undistributed at such time. For purposes of this section, the term undistributed excess endowment amount means, with respect to any specified applicable educational institution for any taxable year as of any time, the amount by which— the distributable amount for such taxable year, exceeds the qualifying distributions made before such time out of such distributable amount. For purposes of this section, the term distributable amount means, with respect to any specified applicable educational institution for any taxable year, an amount equal to 5 percent of the aggregate fair market value of the assets of the institution at the end of the preceding taxable year. The rules of section 4968(d) shall apply for purposes of this section. For purposes of this section— The term qualifying distribution has the meaning given such term in section 4942(g). The rules of subsections
(h)and
(i)of section 4942 shall apply. The rules of paragraphs
(1)and
(2)of section 4942(j) shall apply for purposes of this section. . The table of sections for subchapter H of chapter 42 of the Internal Revenue Code of 1986, as amended by subsection (a), is further amended by adding at the end the following new item: Sec. 4970. Failure to distribute endowment assets. . Subchapter H of chapter 42 of the Internal Revenue Code of 1986, as amended by subsections
(a)and (b), is amended by adding at the end the following new section: There is hereby imposed on each applicable institution of higher education for the taxable year a tax equal to 20 percent of the total amount of excessive tuition received by such applicable institution of higher education during such taxable year. In this section, the term excessive tuition means, with respect to any individual enrolled at the undergraduate level in the applicable institution of higher education during any taxable year, the amount (if any) equal to the excess of— the amount of undergraduate tuition and fees paid by such individual to such applicable institution of higher education during such taxable year, over $40,000. For purposes of paragraph (1)(A), the term tuition and fees has the same meaning given the term qualified tuition and related expenses under section 25A(f)(1). In this section, the term applicable institution of higher education means an institution of higher education as defined in section 102 of the Higher Education Act of 1965 ( 20 U.S.C. 1002 ) that is not— an institution which is controlled by or which is closely identified with the tenets of a particular religious organization; or a medical school, as described in section 487C(a)(2)(A)(ii)(II) of the Higher Education Act of 1965. . The table of sections for subchapter H of chapter 42 of such Code, as amended by subsections
(a)and (b), is amended by adding at the end the following new item: Sec. 4970A. Excise tax on excessive tuition. . The Secretary of the Treasury (or such Secretary's delegate) shall from time to time transfer from the general fund of the Treasury to the Secretary of Commerce amounts equal to the increase in revenues by reason of the enactment of subsections (a), (b), and (c), for the purpose of expanding opportunities relating to employer-led apprenticeship programs and on-the-job workforce training. Such funds shall be available until expended to carry out such activities through grants, cooperative agreements, contracts and other arrangements, with States and other appropriate entities. The amendments made by this section shall apply to taxable years beginning after the date of enactment of this Act.
Connectionstraces to 1
Traces to 1 document
Citation graph
cites case law
Sec. 8
Excise taxes on certain colleges and universities
Cites 1Cited by 0 across 0 sources