On November 16, 2017 the US House of Representatives passed the Tax Cuts and Jobs Act. Nonprofit and Higher Education leaders are reeling from the potential consequences of the bill, but the House website’s description of the bill’s impact on individuals and businesses simply says, “consolidates and repeals several education-related deductions and credits.” In fact, the House bill includes:
Changes in itemization for charitable deductions
Elimination of Private Activity Bonds, often used to finance construction on campuses
Excise tax on private college and university endowments (and only private)
Elimination of tuition remission programs for employees
Elimination of tuition waivers and scholarships to graduate students
Removal of student loan interest deduction
Elimination of employer-provided educational assistance benefits
Yesterday, the Senate Finance Committee passed its version (modified Nov. 16), which thankfully does not include many of the House proposals, but the proposed Senate bill includes:
A 1.4% Excise Tax on Certain Private College Endowment Investment Returns - using a formula based on $250,000 per full time equivalent students identical to the House bill
An Excise Tax on Executive Compensation identical to the House bill
Increased Unrelated Business Income Tax (UBIT) provisions modified from the House bill
We must take action. The final outcome could have serious consequences for higher education. I have contacted my senators using every means possible, and I hope you will too. If you live in Georgia, here is contact information for the Georgia Federal Delegation.
For more information, in addition to the links above to the House and Senate versions of the bill, you may consult the following helpful links: Council on Foundations Action Alert
Let’s rise up in support of private colleges and universities, for our faculty and staff, and especially for the students who benefit from our scholarships and programs. Thank you.
