A good article examining many unknowns of “endowment” tax and how institutions might be affected and/or might avoid the tax through legal strategies:
“It says net investment income will be taxed, but it remains unclear how, specifically net investment income is to be calculated. The bill also carves out some assets from being used to calculate the $500,000-per-student limit asset trigger – those “assets which are used directly in carrying out the institution’s exempt purpose” – but experts don’t know exactly which assets will end up being exempt.”
“The excise tax isn’t even necessarily limited to endowments. While it’s been referred to publicly as an endowment tax, the bill does not use that term. It refers to an “excise tax based on net investment income,” experts pointed out.”
"The bill says that the number of students “shall be based on the daily average number of full-time students attending such institution (with part-time students taken into account on a full-time student equivalent basis).” But Ithaka S&R pointed out that the Integrated Postsecondary Education Data System “collects both fall FTE and 12-month FTE, but it’s unclear which method the provision recommends.”
“Universities on the brink of tipping over the tax’s per-student limits are publicly acknowledging that they are likely to have to pay it in the future. Take the case of two Chicago-area research powerhouses, the University of Chicago and Northwestern University. Some analyses point to the University of Chicago having to pay the tax but Northwestern coming in just below the per-student cutoff. Others have questioned those calculations, and even officials for the universities told the Chicago Tribune they aren’t sure whether they will have to pay the tax next year. But Northwestern anticipates having to pay the tax “if not next year then in later years,” a spokesman told the Tribune.”