Thought this was interesting. Although not a huge fan of the state's "smash and grab", I'd much prefer that money go to the UM System than the general coffers. Anyone familiar with this bill and have any insight on its chances of passing?
New Endowment Tax Bill Hits Missouri Senate
Endowments at private universities in Missouri could be taxed beginning next year under a new bill read in the state legislature this month.
Senate Bill 188 would establish an endowment tax on nonpublic higher education institutions within the state that have assets totaling $40,000 per student and total enrollment above 10,000. The bill was introduced by Sen. Bill Eigel on the senate floor on Jan. 9, according to the Missouri Senate website.
The bill would require the state to collect a 1.9% tax on the aggregate fair value of applicable endowments.
Eigel, a Republican representing the 23rd Senatorial District in St. Charles County, told NPNews he expects the new endowment tax, if implemented, to affect “a half-dozen” institutions across the state, though that estimate is uncertain as not all endowment totals of private institutions are publicly available.
The proposed tax would likely affect institutions such as the $9.2 billion Washington University in St. Louis and $1.2 billion Saint Louis University, according to fin|searches data.
All revenues generated by the endowment tax shall be deposited into the state’s General Revenue Fund, according to the proposed bill, which would simultaneously reduce the state’s individual income tax for top-income earners, reducing the rate to 4.9% from 5.1%.
The purpose of the bill’s proposed endowment tax is to generate new revenue for the state, allowing the government to reduce other taxes as an economic stimulus, while minimizing the financial impact on these institutions, Eigel said.
“It is not our intention to starve the higher education institutions of resources, but to tap the benefit of tax reform, that is keeping money in the economy, finding ways to grow economically and remain competitive with other states,” he added.
If passed, the reduced income tax rate and new endowment tax would go into effect for all tax years beginning on or after Jan. 1, 2020, the state website showed. A vote on the bill has not yet been scheduled.
As SB 188 is currently in its infancy, Eigel said he does not know exactly what obstacles the bill faces on its way through two houses of the Missouri Congress and the Governor’s desk.
“With any bill, there’s naturally obstacles,” he added. “There will be a natural slow-down in this particular process because it’s a new idea, but this bill will start the discussion.”
The state bill is similar to the federal Tax Cuts and Jobs Act passed in December 201 that charges a 1.4% tax on endowment income for institutions with 500 or more students and whose fair market value of assets exceeds $500,000 per student, excluding public colleges and universities (NPN, 1/4/18).
New Endowment Tax Bill Hits Missouri Senate
Endowments at private universities in Missouri could be taxed beginning next year under a new bill read in the state legislature this month.
Senate Bill 188 would establish an endowment tax on nonpublic higher education institutions within the state that have assets totaling $40,000 per student and total enrollment above 10,000. The bill was introduced by Sen. Bill Eigel on the senate floor on Jan. 9, according to the Missouri Senate website.
The bill would require the state to collect a 1.9% tax on the aggregate fair value of applicable endowments.
Eigel, a Republican representing the 23rd Senatorial District in St. Charles County, told NPNews he expects the new endowment tax, if implemented, to affect “a half-dozen” institutions across the state, though that estimate is uncertain as not all endowment totals of private institutions are publicly available.
The proposed tax would likely affect institutions such as the $9.2 billion Washington University in St. Louis and $1.2 billion Saint Louis University, according to fin|searches data.
All revenues generated by the endowment tax shall be deposited into the state’s General Revenue Fund, according to the proposed bill, which would simultaneously reduce the state’s individual income tax for top-income earners, reducing the rate to 4.9% from 5.1%.
The purpose of the bill’s proposed endowment tax is to generate new revenue for the state, allowing the government to reduce other taxes as an economic stimulus, while minimizing the financial impact on these institutions, Eigel said.
“It is not our intention to starve the higher education institutions of resources, but to tap the benefit of tax reform, that is keeping money in the economy, finding ways to grow economically and remain competitive with other states,” he added.
If passed, the reduced income tax rate and new endowment tax would go into effect for all tax years beginning on or after Jan. 1, 2020, the state website showed. A vote on the bill has not yet been scheduled.
As SB 188 is currently in its infancy, Eigel said he does not know exactly what obstacles the bill faces on its way through two houses of the Missouri Congress and the Governor’s desk.
“With any bill, there’s naturally obstacles,” he added. “There will be a natural slow-down in this particular process because it’s a new idea, but this bill will start the discussion.”
The state bill is similar to the federal Tax Cuts and Jobs Act passed in December 201 that charges a 1.4% tax on endowment income for institutions with 500 or more students and whose fair market value of assets exceeds $500,000 per student, excluding public colleges and universities (NPN, 1/4/18).
