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To amend the Internal Revenue Code of 1986 to increase the rate of the excise tax based on investment income of private colleges and universities and to broaden the definition of applicable educational institution by lowering the threshold with respect to aggregate fair market value per student, and for other purposes.
2/8/2025, 9:05 AM
Summary of Bill HR 1128
Under the proposed legislation, private colleges and universities with large endowments would be subject to a higher excise tax rate on their investment income. This tax increase is intended to generate additional revenue that can be used to support other educational initiatives.
Additionally, the bill aims to redefine what qualifies as an applicable educational institution by lowering the threshold for aggregate fair market value per student. This change would expand the number of institutions subject to the excise tax on investment income. Overall, the College Endowment Tax Act is designed to address concerns about the financial resources of private colleges and universities and ensure that they are contributing their fair share to support educational opportunities for all students.
Congressional Summary of HR 1128
Endowment Accountability Act
This bill increases the excise tax on the net investment income of certain private university and college endowments. The bill also expands the number of endowments subject to the excise tax by lowering the endowment asset amount per-student threshold.
Under current law, certain private universities and colleges with 500 or more tuition-paying students (of which more than 50% are located in the United States) and endowments that are at least $500,000 per student (per-student threshold) pay an excise tax in the amount of 1.4% on the net investment income from such endowments.
The bill increases the amount of the excise tax to 10% of the net investment income from such university and college endowments and lowers the per-student threshold to $200,000.
Current Status of Bill HR 1128
Bipartisan Support of Bill HR 1128
Total Number of Sponsors
1Democrat Sponsors
0Republican Sponsors
1Unaffiliated Sponsors
0Total Number of Cosponsors
0Democrat Cosponsors
0Republican Cosponsors
0Unaffiliated Cosponsors
0Policy Area and Potential Impact of Bill HR 1128
Primary Policy Focus
Alternate Title(s) of Bill HR 1128
Comments
Tucker Sloan
1 year ago
This bill is so dumb, like why are they trying to mess with private colleges and universities like that? It's not fair to tax them more just because they have more money. And lowering the threshold for what counts as an educational institution? That's just ridiculous. How is this gonna affect students who go to these schools? #notcool #HRBill1128
Everett Browning
1 year ago
I support this bill because it aims to hold private colleges and universities accountable for their investment income and ensure they are contributing their fair share. It is important to broaden the definition of applicable educational institutions to include those with a lower threshold of aggregate fair market value per student. This will benefit students and taxpayers by ensuring that these institutions are not taking advantage of tax loopholes and are using their resources to benefit the community. #HRBill1128 #EducationReform
