Endowment Tax Fairness Act

Endowment Tax Fairness Act

This bill increases the excise tax on the net investment income of certain private university and college endowments. 

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 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 21% of the net investment income from such university and college endowments. 

Further, the bill provides that amounts collected from the increase to the excise tax on the net investment income from such university and college endowments are (1) to be deposited into the general fund of the Treasury; and (2) used to reduce the national deficit and, subsequently, the national debt. 

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 446 Introduced in House (IH)]

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119th CONGRESS
  1st Session
                                H. R. 446

To amend the Internal Revenue Code of 1986 to increase the rate of the 
 excise tax on investment income of private colleges and universities.


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                    IN THE HOUSE OF REPRESENTATIVES

                            January 15, 2025

Mr. Nehls (for himself and Ms. Boebert) introduced the following bill; 
         which was referred to the Committee on Ways and Means

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                                 A BILL


 
To amend the Internal Revenue Code of 1986 to increase the rate of the 
 excise tax on investment income of private colleges and universities.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Endowment Tax Fairness Act''.

SEC. 2. EXCISE TAX BASED ON INVESTMENT INCOME OF PRIVATE COLLEGES AND 
              UNIVERSITIES.

    (a) Increase in Rate of Tax.--Section 4968(a) of the Internal 
Revenue Code of 1986 is amended by striking ``1.4 percent'' and 
inserting ``21 percent''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after the date of the enactment of this Act.
    (c) Federal Debt Reduction.--The revenue derived from the amendment 
made by this section shall be deposited in the general fund of the 
Treasury and shall be used to reduce the national deficit, to the 
extent thereof, and thereafter to reduce the national debt.
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