U.S. tax reform for tax-exempt organizations and donors | KPMG | US

KPMG report: Tax reform for tax-exempt organizations and donors

U.S. tax reform for tax-exempt organizations and donors

Congress has passed the conference agreement for tax reform.


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On Friday, December 15, the conference committee approved the report of its agreement on H.R. 1, the tax reform bill. The conference report is a compromise bill, blending elements of both the previously passed House and Senate versions of the bill. The House on December 19 passed the conference report. The Senate then passed a modified version of the bill to strike three provisions that violated Senate rules, including the “tuition-paying” requirement in determining whether a private college or university is subject to the excise tax on its endowment. Today, the House passed H.R. 1, as revised by the Senate.

Provisions for tax-exempt organizations

A number of provisions in H.R. 1 would affect tax-exempt organizations and their donors, including:

  • Impose a 1.4% excise tax on the investment income of certain private colleges and universities
  • Impose an entity-level tax on excess compensation
  • Compute unrelated business taxable income (“UBTI”) separately for each unrelated trade or business 
  • Include the value of certain fringe benefits that are non-deductible under section 274 as UBTI


Read a KPMG report [PDF 156 KB] that identifies in table format, certain provisions and highlight differences among the House bill, Senate bill, and H.R. 1 (the conference report), as modified on December 20, 2017. 


For more information, contact a tax professional with KPMG’s Washington National Tax practice:

Greg Goller | +1 703 286 8391 | greggoller@kpmg.com

Alexandra Mitchell | +1 202 533 6078 | aomitchell@kpmg.com

Preston Quesenberry | +1 202 533 3985 | pquesenberry@kpmg.com 

Randall Thomas | +1 202 533 3786 | randallthomas@kpmg.com

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