The Republican-led congressional proposal to change the federal income tax code includes a provision that would tax the endowments of private colleges and universities.
The “Tax Cuts & Jobs Act,” released Thursday, would collect a 1.4 percent tax on net investment income of schools with more than 500 students and assets of at least $100,000 per student.
Colleges and universities are currently exempt from such taxes because most are non-profits. President Donald Trump spoke critically of the tax break on the campaign trail last year.
Several Georgia private colleges and universities could be impacted if Congress passes the tax legislation.
Emory University reported last November a 1.9 percent return, net of all fees, on its endowment for the fiscal year ending Aug. 31, 2016, and it was valued at $6.5 billion. Emory distributed $230 million during that fiscal year to support its academic programs and clinical research.
Emory president Claire Sterk wrote a letter Tuesday to U.S. Sen. Johnny Isakson, R-Ga., raising concerns about the endowment tax, saying it helps fund patient care and financial aid. Sterk said it would “severely undercut our ability to fulfill donor wishes and ensure the endowment’s longevity and integrity.”
Berry College reports on its website that it has a $968 million endowment.
Spelman College had a $347 million endowment as of June 2016, according to its website. Agnes Scott College’s endowment was at $230 million in June, according to its website.
Several of these institutions said Thursday they were reviewing the proposed legislation.