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HB 7147

AN ACT AUTHORIZING MUNICIPALITIES TO IMPOSE A TAX ON THE ENDOWMENT FUNDS OF PRIVATE INSTITUTIONS OF HIGHER EDUCATION.

2025 Regular Session Introduced by Nick Gauthier

HB 7147 - Authorizing Municipal Tax on Higher Ed Endowments OverviewBill Number: HB 7147 Title: AN ACT AUTHORIZING MUNICIPALITIES TO IMPOSE A TAX ON THE ENDOWMENT FUNDS OF PRIVATE

FILE NO. 624
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Bill Summary · HB 7147

HB 7147 - Authorizing Municipal Tax on Higher Ed Endowments

Overview

Bill Number: HB 7147
Title: AN ACT AUTHORIZING MUNICIPALITIES TO IMPOSE A TAX ON THE ENDOWMENT FUNDS OF PRIVATE INSTITUTIONS OF HIGHER EDUCATION
Status: FILE NO. 624
Introduced: March 05, 2025

Purpose and Intent

This bill aims to grant municipalities the authority to levy a tax on the endowment funds of private colleges and universities within their jurisdiction. The primary rationale is to generate additional revenue for local governments, which proponents argue could help address funding shortfalls and provide resources for community services.

Key Provisions

  • Allows municipalities to impose an annual tax of up to 2% on the endowment funds of private, non-profit institutions of higher education
  • Defines "endowment fund" as the total fair market value of an institution's permanent funds, excluding funds specifically restricted for capital projects
  • Requires institutions to annually report the value of their endowment funds to the municipal tax collector
  • Grants municipalities the authority to audit an institution's endowment fund reporting and collect unpaid taxes with penalties

Affected Parties and Impacts

  • Private, non-profit colleges and universities would be subject to the new municipal tax on their endowment funds
  • Institutions with larger endowments would face higher tax burdens, potentially reducing funds available for scholarships, programs, and campus operations
  • Local governments could see increased revenue from the endowment taxes, which they could allocate towards public services and community needs

Procedural and Timeline Considerations

HB 7147 was introduced in the state legislature on March 5, 2025 and is currently in the committee review process. If passed, the bill would take effect on January 1, 2026, allowing municipalities time to establish the necessary tax collection procedures. The legislation does not specify a sunset provision, suggesting the endowment tax could remain in place indefinitely unless repealed or amended in the future.

Compiled from official sources — confirm details with the bill’s official record.

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