Contrary to its name, The Tax Cuts and Jobs Act resulted in a tax increase for certain entities. For example, certain well-endowed private universities and colleges are now subject to a 1.4% excise tax on their net investment income. This tax increase is set forth in Section 4968 of the Internal Revenue Code, and it generally applies to private universities that at the end of their prior taxable year (a) had at least 500 full-time,…

On June 10, 2019, Senators Michael Bennet (D-CO) and Rob Portman (R-OH) introduced Senate Bill 1763 (the “Carbon Capture Bill”), which, if passed, would allow the issuance of exempt facility bonds for “qualified carbon dioxide capture facilities.”  The Carbon Capture Bill has bipartisan support as this bill encourages continued use of carbon-generating natural resources by providing a new tax-exempt financing option for capital expenditures related to a green countermeasure – carbon capture and sequestration. If…

On May 22, 2019, the IRS issued IRS Notice 2019-39  (the “Original Notice”), which sought to bring efficiency and uniformity to guidance on the current refunding of certain bonds issued under current and future “targeted” tax-exempt bond programs. While the Original Notice set forth helpful guidance on the tax-exempt current refunding of bonds issued under a targeted bond program, it also created some confusion regarding the tax-exempt current refunding of build America bonds (which everyone…

To promote the provision of disaster relief and the development (or redevelopment) of economically distressed areas, Congress will at times enact targeted bond programs that authorize the issuance of specialized tax-exempt bonds.  Tax-exempt targeted bond programs frequently contain both a cap on the amount of tax-exempt bonds that can be issued under the program and an expiration date.  For example, in response to Hurricane Katrina, Congress permitted the issuance of tax-exempt Gulf Opportunity Zone Bonds,…

On May 3, 2019, the Internal Revenue Service released Private Letter Ruling 201918008.  The IRS concluded in that PLR that an issuer of exempt facility bonds used a reasonable method, under all the facts and circumstances, to determine whether the term of an operating agreement entered into with a private party exceeded 80% of the weighted average economic life of the bond-financed assets that are subject to that agreement.  This PLR could have utility…

The Opportunity Zone program was created by the 2017 Tax Cuts and Jobs Act (which we have previously written about here, here and here), to allow investors the “opportunity” to defer paying tax on gains from selling property by investing the proceeds from the sale into an Opportunity Zone Fund. The IRS issued a first round of proposed regulations on October 19, 2018. The IRS has now issued a second, far lengthier, round…

On April 3, 2019, the IRS published Rev. Proc. 2019-17, which provides that multifamily housing projects (or, for those of you who prefer Grey Poupon, “qualified residential rental projects”) won’t violate the general public use requirement even if the landlord offers units of the project to certain specific groups. Congress had made this point clear for low-income housing tax credits (“LIHTC”), which are often used in connection with tax-exempt multifamily housing bonds. Multifamily housing bonds have…