What This Bill Does · Plain English
Summary · Congress.gov
Higher Education Accountability Tax Act This bill increases the excise tax on the net investment income of certain private university and college endowments and expands the number of universities and colleges that are subject to the excise tax. 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 endowment assets of 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. Endowment assets that are used directly in carrying out the institution's tax-exempt educational purpose are excluded from the tax. The bill increases the amount of the excise tax to (1) 10% of the net investment income from a university and college endowment, or (2) 20% of the net investment income from a university and college endowment maintained by an institution that increases tuition over a three-year period (preceding the current tax year) at a rate that is higher than the inflation rate. Under the bill, the tuition price for purposes of determining whether the 20% excise tax rate applies is the average yearly price charged to all first-time, full-time undergraduate students (including students who receive financial aid). Further, the bill expands the number of universities and colleges subject to the excise tax by lowering the per student threshold to $250,000.
Action Timeline
2025-02-05
Referred to the House Committee on Ways and Means.
2025-02-05
Introduced in House
2025-02-05
Introduced in House
Frequently Asked Questions
Did HR.1006 pass?
HR.1006 is still alive. Current stage: COMMITTEE. Pass likelihood: 38%.
What does HR.1006 do?
Higher Education Accountability Tax Act This bill increases the excise tax on the net investment income of certain private university and college endowments and expands the number of universities and colleges that are subject to the excise tax. 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 endowment assets of 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. Endowment assets that are …
Who sponsored HR.1006?
HR.1006 was sponsored by David P. Joyce (R-Ohio).
Full Bill Text
119 HR 1006 IH: Higher Education Accountability Tax Act U.S. House of Representatives 2025-02-05 text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain. I 119th CONGRESS 1st Session H. R. 1006 IN THE HOUSE OF REPRESENTATIVES February 5, 2025 Mr. Joyce of Ohio (for himself and Ms. Malliotakis ) introduced the following bill; which was referred to the Committee on Ways and Means A BILL To amend the Internal Revenue Code of 1986 to modify the excise tax on investment income of private colleges and universities. 1. Short title This Act may be cited as the Higher Education Accountability Tax Act . 2. Modification of excise tax 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 10 percent . (b) Additional increase in rate of tax for institutions with increases in net price (1) In general Section 4968(a) of such Code, as amended by subsection (a), is amended by inserting (20 percent in the case of a net-price-increase institution) after 10 percent . (2) Net-price-increase institution Section 4968(b) of such Code is amended by redesignating paragraph (2) as paragraph (3) and by inserting after paragraph (1) the following new paragraph: (2) Net-price-increase institution The term net-price-increase institution means any applicable educational institution for any taxable year if, during the 3-taxable-year period ending with the taxable year immediately preceding such taxable year, the net price of such institution increased at a rate which exceeds the rate of increase in the Consumer Price Index (as defined in section 1(f)(5)) for such period. For purposes of the preceding sentence, the term net price has the meaning given such term by section 132(a)(3) of the Higher Education Act of 1986 ( 20 U.S.C. 1015a(a)(3) ) except that such price shall be determined by taking into account all first-time, full-time undergraduate students at the institution (in addition to such students who receive student aid). . (c) Expansion of institutions subject to tax Section 4968(b)(1)(D) of such Code is amended by striking $500,000 and inserting $250,000 . (d) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2024.
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