Sponsor
Gregory Francis Murphy
Representative · R-NC
Representative · R-NC
The bill increases clarity and creates incentives to divest from national-security‑listed entities, but it also imposes potentially large, immediate tax liabilities and compliance rules that could reduce endowment returns and force program cuts or higher costs for students and nonprofits.
Colleges, universities, and nonprofits will get a single, consolidated Treasury 'listed persons' list within 60 days, giving them clearer, centralized guidance on which investments trigger the tax and reducing uncertainty about compliance.
Institutions that invest through certified pooled funds or ETFs can use a certification procedure that reduces administrative burdens and preserves some investment options, lowering compliance costs for large investors.
Large private universities and similar entities are given a strong financial incentive to divest from entities on U.S. national-security lists, reducing the risk that endowment dollars support companies tied to national-security concerns.
Large private universities with more than $1 billion in non-exempt assets could face immediate hefty tax bills (up to 50% of acquisition value or 100% of one-year income), sharply reducing endowment returns and resources available for operations.
Institutions may be forced to divest or shift portfolios to avoid the tax, which could lower long‑term returns and increase pressure to cut academic programs, reduce financial aid, or raise tuition—hurting students, faculty, and staff.
Aggregating assets across related organizations for the $1 billion threshold (including affiliated foundations) could pull more institutions and nonprofits into coverage unexpectedly, creating new tax exposures and planning complexity.
Based on analysis of 2 sections of legislative text.
Imposes steep excise taxes on large private college endowment investments in entities on Commerce/FCC restricted lists and taxes income from certain short-term listed investments.
Official title: To amend the Internal Revenue Code of 1986 to impose an excise tax on certain investments of private colleges and universities.
Introduced July 16, 2025 by Gregory Francis Murphy · Last progress July 16, 2025
Imposes heavy excise taxes on large private colleges and universities that acquire or earn income from investments in companies or entities that appear on certain Commerce Department or FCC restricted lists. Institutions with more than $1 billion in non-exempt assets that are not state colleges would face a 50% excise tax on the fair market value of covered investments at acquisition and up to a 100% tax on net income from one-year listed investments, with Treasury required to publish a consolidated "listed persons" list and to issue implementing rules. The tax provisions apply after short transition periods tied to enactment and the publication of the listed persons list, include aggregation rules for related organizations to determine the $1 billion threshold, permit Treasury to certify pooled funds as free of listed investments, and allow Treasury to issue regulations and valuation rules for debt and other items.