Companies donating equipment and research funding to universities may received additional tax breaks it a bill before Congress becomes law a University official said yesterday.
The bill would also cutback on the availability of student loans and permit taxation of fringe benefit loans to professors, said Nancy F Nixon. Harvard's director of governmental relations.
The bill, the Deficit Reduction Act of 1984, is now before the Senate, while a similar bill without the educational clauses will probably reach the House floor this week according to Nixon.
The provisions are "not good news, and they may be bad news," said Financial Vice President Thomas O'Brien.
Another provision would give universities tax deductions for providing educational assistance programs for their employees Nixon said the clauses directly affecting Harvard have an even chance of becoming law in a House--Senate compromise bill.
"We're operating with a fair degree of concern." said Daniel Steiner '54, adding that 1500 faculty and staff members currently receive government loans or reduced tuition benefits.
Taxing fringe benefits and corporate donations has been under debate for over 10 years, he said.
The IRS keeps saying it's going to tax these things, and Congress keeps passing moratoriums on certain benefits." he said.
The bill would extend the moratorium of taxing employee tuition assistance programs to 1985 and make the moratorium of equipment and research grants permanent, he said.
Vice President for Administration Robert H Scott said the equipment provisions would give companies tax deductions corresponding to the market price of equipment as opposed to previous years deductions based on product cost.
Corporate donations have gone up since the temporary moratoriums on taxation for cost and profit were enacted, Scott said.
In the past years, the Division of Applied Sciences has received between $1.5 and $2 million in equipment from companies "who certainly took the larger tax deductions into account" said Associate Dean of the Division of Applied Sciences Peter S. McKinny, adding that the bill is "a very helpful way to solve a difficult problem."