Tax Cuts and Jobs Act: Amendments Affecting Tax-Exempt Organizations

November 10, 2017

Federal tax reform continues as House Ways and Means Committee Chair Kevin Brady (R-Texas) offered his second amendment to the Tax Cuts and Jobs Acts on Nov. 9, modifying recently introduced legislation discussed in McGuireWoods’ legal alert “Key Provisions of the Tax Cuts and Jobs Act for Tax-Exempt Organizations.”

Colleges and Universities 

The original legislation would have imposed a 1.4 percent excise tax on net investment income from the endowment of any private college or university that has at least 500 students and investment assets valued at $250,000 or more per full-time student. The amendment would expand that provision to include income from investment assets of any organization related to the private college or university, including supporting organizations.    

Political Campaign Intervention 

The original legislation would have allowed churches and other religious organizations to take a position on behalf of, or in opposition to, a political candidate, as long as the speech was in the ordinary course of the organization’s business and its expenses were de minimis. The amendment provides that all § 501(c)(3) organizations could make such statements in the ordinary course of  their business if the expenses were de minimis. This change would become effective Jan. 1, 2019, and sunset on Dec. 31, 2023. 

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