Changes from the Tax Cut and Jobs Act
APPA would like to make sure our members are aware of the changes from the Tax Cut and Jobs Act that is very close to enactment by Congress and the White House. There are significant effects on higher education and our students. According to our colleagues from NACUBO (University Business Officers) these are some of the implications:
- The proposed excise tax on college and university endowments will result in fewer dollars available for scholarships, student services, research, and college and university operating expenses.
- The changes to the taxation of unrelated business income include a new tax standard for nonprofit entities not faced in the corporate sector, and a tax on revenue streams that for large institutions can generate significant income for student aid.
- Doubling the standard deduction without creating another charitable giving incentive will have a damaging impact on gifts to colleges and universities that rely on giving to enhance their ability to provide scholarship aid and deliver on education and research expectations.
- Limiting access to the bond market will dramatically increase borrowing costs and will likely result in diminished investments in infrastructure and renovation of aging facilities. Colleges use these bonds to acquire, construct, and restore hospitals, academic buildings, residence halls, athletic facilities, research laboratories, energy plants, and more.
Our intentions are to educate our members and bring you up to speed on what University Business Officers are discussing and how this impacts Facility Officers and our profession. Here is a link through our colleagues at NACUBO for more information on this topic: http://www.nacubo.org/Initiatives/Tax_Reform.html.
E. Lander Medlin
Executive Vice President