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Business and Policy Areas
Business and Policy Areas
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NACUBO Weighs In on Tax Reform

July 21, 2017

Sen. Orrin Hatch (R-UT), chairman of the Senate Finance Committee, recently asked for public input on the committee’s work on comprehensive tax reform efforts. NACUBO submitted comments, which illustrated that “without careful consideration, tax policy changes could significantly alter both revenue streams and expenditures at institutions of higher education and put undesirable upward pressure on tuition and fees.”

NACUBO also endorsed several other organizations’ responses to Hatch’s request.

Existing proposals are short on specifics, but there is potential that institutions of higher education could face significant impacts once legislation is introduced.
NACUBO made the following recommendations in its statement:

Charitable Giving

  • NACUBO supports enactment of a universal, or above-the-line, charitable deduction that would allow all American taxpayers to subtract their charitable gifts from their income before they determine whether to take the standard deduction or itemize their tax returns.

Endowments

  • NACUBO objects to the endowment excise tax proposed in the House Tax Reform Act of 2014.

Tax-exempt Bond Financing

  •  NACUBO requests that lawmakers protect and maintain tax-exempt bond financing, including qualified 501(c)(3) private-activity bonds. Access to these bonds contributes significantly to the financial health of colleges and universities.

Unrelated Business Income

  • NACUBO objects to the House Tax Reform Act of 2014 proposals to treat name and logo royalties as unrelated business taxable income; modify rules concerning qualified sponsorship payments; and compute unrelated business taxable income separately for each trade or business.

Section 127

  • NACUBO supports the preservation of Section 127. Further, NACUBO supports proposals that emerged in the last session of Congress to expand and improve the benefit by increasing the $5,250 limit, expanding the eligible uses to include loan repayment, and allowing the benefit to be available to spouses and children of employees.

Section 117(d)

  • NACUBO supports preserving Section 117(d), which permits educational institutions, including colleges and universities, to provide employees and their spouses or dependents with tuition reductions that are excluded from taxable income.

Student FICA

  • NACUBO supports the Student FICA exception.

Saving for College

  •  NACUBO supports preserving the tools that encourage and help families save for college: Coverdell Education Savings Accounts and Section 529 College Savings Plans.

Paying for College

  •  NACUBO supports simplifying and adjusting the incentives that help students and families pay for college and employers build a skilled workforce.
  • NACUBO supports expanding the Student Loan Interest Deduction.

NACUBO urges its members to work with with the campus communications and government relations officials to discuss issues of concern to your college or university. The August congressional recess provides a terrific opportunity to host members of Congress and their staff and discuss how your institution could be uniquely impacted by this wide-ranging scope of proposed tax changes.

Contact

Liz Clark
Director, Federal Affairs
202.861.2553
E-mail