Iowa colleges would pay a tax on endowments larger than $250 million under a bill advanced by a House subcommittee.
The 15% tax would apply to both private and public colleges and universities in the state. The tax money would go toward scholarships for college students pursuing degrees in high-demand jobs.
Frank Chiodo, a lobbyist from the Iowa Association of Independent Colleges and Universities, is against the bill. He estimates four to five private colleges would be significantly impacted by the proposal.
“I really find this interesting,” Chiodo said. “We’re going to tax a nonprofit endowment 15% because [the] government knows how to spend their money better?”
The head of the House higher education committee, Rep. Taylor Collins, R-Mediapolis, said at the end of the meeting that the bill will be changed to impact endowments of more than $500 million, and instead of 15%, the endowments would be taxed at the corporate rate.