Sec. 2. Excise taxes on certain contributions by foreign entities
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Subchapter H of chapter 42 of the Internal Revenue Code of 1986 is amended by adding at the end the following new sections: There is hereby imposed on each applicable institution for the taxable year a tax equal to 300 percent of the income of such institution received from any foreign country of concern during the taxable year. For purposes of this section, the term applicable institution means an eligible educational institution (as defined in section 25A(f)(2))— which had at least 500 tuition-paying students during the preceding taxable year, and more than 50 percent of the tuition-paying students of which are located in the United States, determined according to the rules of section 4968(b)(2).
For purposes of this section, the term foreign country of concern has the meaning given such term by section 10612(a) of the Research and Development, Competition, and Innovation Act. Rules similar to the rules of section 4968(d) shall apply in determining income of an applicable institution for purposes of this section. There is hereby imposed on each institution for the taxable year a tax equal to 110 percent of the unreported foreign funding received by such institution during the taxable year.
For purposes of this section, the term unreported foreign funding means an amount equal to the value of any gift or contract, or any amount received pursuant to a change in ownership or control, required to be reported under section 117 of the Higher Education Act of 1965 which is determined not to have been so reported by an audit under subsection
(g)of such section. The tax imposed by subsection
(a)shall be due not later than 180 days after the institution is notified of the results of the audit under section 117(g) of the Higher Education Act of 1965. In the case of any unreported foreign funding which is received from a foreign country of concern (as defined in section 4969(c)), the tax imposed by subsection
(a)shall be in addition to any tax imposed by section 4969 on such funding. For purposes of this section, the term institution , and any other term used in this section which is used in section 117 of the Higher Education Act of 1965, has the same meaning as when used in such section. . 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 items: Sec. 4969. Excise tax on contributions to colleges and universities by foreign countries of concern. Sec. 4970. Excise tax on failure to report contributions by foreign entities. . The heading of subchapter H of chapter 42 of such Code (and the item relating to such subchapter in the table of subchapters for such chapter) are each amended by striking and inserting Tax Based on Investment Income of . Taxes on The amendments made by this section shall apply to taxable years beginning after the date which is 60 days after the date of the enactment of this Act.