Tax insight

House-passed “One Big Beautiful Bill Act” includes provisions affecting universities, foundations, and other tax-exempts

Insight
10 minute read
May 27, 2025

What happened?

The House on May 22 voted 215 to 214 to pass H.R. 1, the “One Big Beautiful Bill Act” including proposed tax law changes, increased funding for border security and national defense, and spending reductions affecting a large number of federal programs. The bill includes a provision to increase the federal statutory debt limit by $4 trillion. The bill also features a number of new proposals affecting universities, foundations, and other tax-exempt organizations.

H.R. 1 as passed by the House reflects a “manager’s amendment” adopted by the House Rules Committee that modified a number of provisions that had been reported by the Ways and Means Committee and other House committees.

Why is it relevant?

House passage of H.R. 1 clears the way for Senate action on the legislation to begin in June, after Congress returns from a Memorial Day recess. H.R. 1 is being considered under reconciliation instructions provided in the fiscal year (FY) 2025 budget resolution approved in April by Congress that will allow the legislation to be approved by Republicans in the Senate with a simple-majority vote, instead of the 60-vote majority usually required. Congressional leaders have set a goal of sending a final bill to be signed by President Trump before Congress begins a July 4 recess, but the House and Senate will have to agree on a final identical version of H.R. 1 that can be approved by both chambers.

Action to consider

Tax-exempt organizations will need to quickly evaluate the potential effect of proposed tax law changes in H.R. 1 as passed by the House and consider whether to pursue opportunities to modify the legislation as it advances in the Senate.