AAMC Joins Letter in Urging Tax-Exempt Status for Higher Education Institutions

The AAMC joined 19 other members of the higher education community in a response to an Oct. 14 request for input from Republican House Ways and Means Committee Tax Teams. Chair Jason Smith (R-Mo.) and Tax Subcommittee Chair Mike Kelly (R-Penn.) announced the formationof the Ways and Means Tax Teams in April to reexamine provisions from the Tax Cuts and Jobs Act (P.L. 115-97) that will expire in 2025 and to identify areas to work on in the future. These teams requested feedback by Oct. 15.

Among other provisions, the letter highlighted that tax-exempt status supports the services of all higher education institutions, but especially teaching hospitals. The groups requested that Congress reinstate the advance refunding of tax-exempt bonds, a policy that was eliminated in the bill that previously helped reduce debt service costs by providing access to lower interest rates. The letter also touched on items that are of particular concern to undergraduate institutions, such as supporting the American opportunity tax credit and lifetime learning credits, repealing the taxability of Pell Grants, and repealing or reforming the endowment tax.

The AAMC also submitted its own response to the tax teams on Oct. 14, which highlighted the crucial roles that AAMC-member academic health systems and teaching hospitals, medical schools, and physician faculty play in serving their communities and urged the tax teams to work with AAMC and other interested parties to consider targeted revisions to the IRS form 990 Schedule H, develop a more comprehensive definition of community benefit, and reject the elimination or restriction of the tax-exempt status of nonprofit hospitals [see related story]