Yesterday the House Ways and Means Committee released H.R. 1, titled the “Tax Cuts and Jobs Act,” which provides, beginning as of January 1, 2018, that museums classified as private operating foundations must be open to the public for a minimum of 1,000 hours a year. This means, for example, the museum would need to be open to the general public for eight hours a day, five days a week over an approximate six-month period. This may be a significant change for certain museums which currently have more restrictive public hours.
Museums that are POFs are a type of private foundation that use tax-free donations to fund their own activities rather than issue grants to other charities.
Current law allows that museums that are POFs are exempt from paying the excise taxes that other private foundations are required to pay. In addition, these POFs are exempt from paying a 30 percent excise tax on certain earnings that are not distributed.