Provides a tax upon the endowment of a private institution of higher education equal to two percent (2%) upon each dollar over $1,000,000,000.

Rhode Island Private University Endowment Tax Bill

This bill would create a new state tax on the large financial reserves — called endowments — held by private colleges and universities in Rhode Island. Specifically, any private higher education institution with an endowment exceeding $1 billion would be required to pay a 2% annual tax on every dollar above that $1 billion threshold. For example, if a university had a $2 billion endowment, it would owe 2% of $1 billion (the amount over the threshold), which would equal $20 million in taxes.

In practical terms, this bill would primarily affect Rhode Island's wealthiest private universities, most notably Brown University, which holds one of the largest endowments in the country. Smaller private colleges with endowments under $1 billion would not be affected at all. The money collected from this tax would go to the state of Rhode Island, potentially providing a new source of public revenue.

Supporters of similar proposals around the country have argued that large university endowments represent significant untapped wealth that could benefit the broader public, while critics often raise concerns that such taxes could reduce funds universities use for financial aid, research, and campus operations. This bill has been introduced and referred to the House Finance Committee, where lawmakers will review and decide whether to advance it further through the legislative process.