WEST Act of 2025

This bill amends the Internal Revenue Code to impose a 6% excise tax on the endowments of certain large private colleges and universities. Sec. 2, Excise tax on certain large private college and university endowments: This section adds a new tax on specified applicable educational institutions for their first taxable year beginning in 2025. The tax is 6% of the aggregate fair market value of the institution's assets at the end of the preceding taxable year. A specified applicable educational institution is defined as any applicable educational institution (other than one that is religious in nature) with assets (excluding those used directly for exempt purposes) of at least $11,900,000,000, or any applicable educational institution that operates a college on behalf of a state with assets of at least $10,500,000,000. The rules for determining assets and students follow existing sections 4968(d) and 4968(b)(2). The amendments apply to taxable years beginning after December 31, 2024.