Protecting Endowments from Our Adversaries Act
Sponsored By: Representative Rep. Murphy, Gregory F. [R-NC-3]
Introduced
Summary
Creates excise taxes on certain foreign-linked investments held by very large private colleges and universities. The bill would impose two linked taxes on "listed investments": a 50 percent tax on the fair market value at acquisition and a 100 percent tax on net income from listed investments held for one year.
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Bill Overview
Analyzed Economic Effects
3 provisions identified: 1 benefits, 2 costs, 0 mixed.
Big taxes on colleges' restricted investments
If enacted, certain large private colleges that buy investments tied to companies on federal restricted lists would owe new excise taxes. One tax would be 50% of the purchase value; for debt, it uses the principal amount. A second tax would be 100% of net income and gains from listed investments held as listed for a full prior year. Holdings through ETFs, mutual funds, or other pooled funds would still count unless the fund is certified as not holding listed investments.
Phase-in rules for college investment taxes
If enacted, the rules would start for taxable years ending after the earlier of two dates: the end of the first calendar year after enactment, or one year after Treasury creates the listed persons list. The 50% acquisition tax would not apply to investments bought before that calendar year ends. The 100% net income tax would not apply to income or gains before the one-year list period ends.
Which colleges and investments would face taxes
If enacted, only private colleges with over $1 billion in assets not used directly for their mission would be covered. Public state or federal schools would be excluded. Related foundations’ assets would usually count, but assets not available to the school would be excluded unless the school controls the organization or it is a supporting organization. Listed investments would include stock, equity or profits interests, debt, and related derivatives tied to companies on Commerce or FCC restricted lists. Treasury would create and update a combined list within 60 days and could issue guidance, including for foundation and pooled-fund holdings.
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Sponsors & CoSponsors
Sponsor
Rep. Murphy, Gregory F. [R-NC-3]
NC • R
Cosponsors
There are no cosponsors for this bill.
Roll Call Votes
No roll call votes available for this bill.
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