Bipartisan legislation that would repeal a new excise tax on large endowments included in last year's tax reform bill was introduced Thursday in the House by Rep. John K. Delaney, D-Md., and Rep. Bradley Byrne, R-Ala.
Beginning in tax year 2018, large endowments will have to pay a 1.4% excise tax on net endowment income. The number of endowments subject to it could grow in the future because there are no adjustments for inflation. The tax applies to institutions with at least 500 students and net assets of $500,000 per student, and does not include state colleges and universities.
The proposed Delaney-Byrne Don't Tax Higher Education Act is supported by the National Association of College and University Business Officers and numerous higher education groups. NACUBO President and CEO John Walda in a statement called the bill "a sound policy step squarely in the public interest" because the new excise tax would mean fewer dollars available for scholarships, student services, research and operating expenses.
The legislation has not been scheduled for hearings or further action yet.