Update of State Taxation of University Endowment Income

• In Event: Federal Tax-Exemption and Charity

Abstract

The TCJA of 2017 first began the taxation of university endowment income. As the current tax bill passes through the House and Senate, the tax of net investment income is primed to increase. At the same time, state legislators have begun to float the idea of taxing the income of universities. This paper will look at the federal and state level landscape of investment taxation, studying the reasons legislators sought to tax this income. Further, the paper will catalogue and explore how frequently this proposed tax passed on the state level and compare and contrast how the states decide to tax, including the tax rate and details of the tax, including whether universities can avoid the tax by investing in student success.

Author

• Robert McCarthy, rm6082@nyu.edu