[T]he federal tax package enacted in December includes a new tax on nonprofits that pay salaries over $1 million.
The new 21 percent tax would be on employers for the highest five salaries the organization pays that are $1 million or more per year.
The new tax is likely to predominantly impact larger institutions in higher education and hospital groups nationwide, according to Rick Cohen of the National Council of Nonprofits.
The number of organizations impacted in Vermont would likely be very few. In public disclosures, there are only a few salaries at Vermont hospitals and at Dartmouth-Hitchcock in New Hampshire that would be high enough to trigger the tax.
Experts were not aware of any higher education institutions in Vermont that would qualify.
The 21 percent excise tax would be applied to the amount in excess of $1 million.
Michael Carrese, a spokesperson for UVM Medical Center, said the hospital is assessing what the effect of the provision will be.
Dr. John Brumsted, the chief executive officer of the UVM Health Network, received a total compensation package of $2 million in 2015, the most recent year public records are available.
“We know that the University of Vermont Health Network will be impacted,” Carrese said. “However, we will be looking to the IRS for guidance to help determine what the impact will be.”
Carrese said the organization hopes to have a “full understanding” of the effect the provision will have in the “near future.”
Rutland Regional Medical Center — which has disclosed compensation packages near the $1 million threshold — does not anticipate that the tax will affect the organization, according to spokesperson Peg Bolgioni. The new tax would have a “minimal impact” on the medical center, Bolgioni said. “No one is subject to the excise tax at RRMC,” she said.
Kevin Mullin, who chairs the Green Mountain Care Board, said the regulatory panel is monitoring changes at the federal level and their impacts on Vermonters.
“The recent changes in the tax bill, including the 21% excise tax, have not been discussed before the Board, but is something that may be discussed during our annual hospital budget review,” he said in a statement.
Meanwhile, the impact on higher education organizations in Vermont is expected to be minimal.
The University of Vermont does not report any salaries of $1 million or more.
Susan Stitely of the Association of Vermont Independent Colleges said Thursday she was “fairly confident” that no private colleges in Vermont pay presidents more than $1 million a year. Middlebury President Laurie Patton was paid about $260,000 in 2016, according to the college’s tax return.
