Higher Education Accountability Tax Act
Bill: H.R.8883 | Sponsor: Rep. Joyce, David P. (R-OH)
Policy area: Taxation

Summary:
Higher Education Accountability Tax Act
This bill increases from 1.4% to 10% the rate of the excise tax on the net investment income of applicable educational institutions (i.e., certain private colleges and universities). It further increases to 20% the rate of such tax on net-price-increase institutions (i.e., educational institutions whose net price increased at a rate exceeding the rate of increase in the Consumer Price Index during a specified three-year period). The bill also modifies the definition of applicable educational institution to lower the per student threshold in that definition from $500,000 to $250,000 (thus making more such institutions subject to the excise tax).

To amend the Internal Revenue Code of 1986 to modify the excise tax on 
        investment income of private colleges and universities.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Higher Education Accountability Tax 
Act''.

SEC. 2. MODIFICATION OF EXCISE TAX ON INVESTMENT INCOME OF PRIVATE 
              COLLEGES AND UNIVERSITIES.

    (a) Increase in Rate of Tax.--Section 4968(a) of the Internal 
Revenue Code of 1986 is amended by striking ``1.4 percent'' and 
inserting ``10 percent''.
    (b) Additional Increase in Rate of Tax for Institutions With 
Increases in Net Price.--
            (1) In general.--Section 4968(a) of such Code, as amended 
        by subsection (a), is amended by inserting ``(20 percent in the 
        case of a net-price-increase institution)'' after ``10 
        percent''.
            (2) Net-price-increase institution.--Section 4968(b) of 
        such Code is amended by redesignating paragraph (2) as 
        paragraph (3) and by inserting after paragraph (1) the 
        following new paragraph:
            ``(2) Net-price-increase institution.--The term `net-price-
        increase institution' means any applicable educational 
        institution for any taxable year if, during the 3-taxable-year 
        period ending with the taxable year immediately preceding such 
        taxable year, the net price of such institution increased at a 
        rate which exceeds the rate of increase in the Consumer Price 
        Index (as defined in section 1(f)(5)) for such period. For 
        purposes of the preceding sentence, the term `net price' has 
        the meaning given such term by section 132(a)(3) of the Higher 
        Education Act of 1986 (20 U.S.C. 1015a(a)(3)) except that such 
        price shall be determined by taking into account all first-
        time, full-time undergraduate students at the institution (in 
        addition to such students who receive student aid).''.
    (c) Expansion of Institutions Subject to Tax.--Section 
4968(b)(1)(D) of such Code is amended by striking ``$500,000'' and 
inserting ``$250,000''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2022.
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