Unrelated Business Income Tax
The University may be subject to tax on unrelated business income, if the income is from a trade or business which is regularly carried on by a university department and which is not substantially related to furthering the exempt purpose of the University. The IRS Publication 598 http://www.irs.gov/publications/p598/index.html contains examples of situations where tax liability will apply.
The Controller s Office uses the IRS Publication 598, Form and Instructions for Form 990-T http://www.irs.gov the Tax Law of Colleges and Universities, Bertrand M. Harding, JR., and financial information from the pertinent University departments to prepare the annual UBIT return (990-T).
The 990-T return is due November 15th; therefore, prior to August 31st, the following tasks have to be performed:
Send memoranda to pertinent departments requesting UBI revenues and expenditures from the University Center and Live Oak Pavilion rentals, Arena rentals, Vessel rentals and Physical Plant repair costs.
When applicable, reconcile balances provided by pertinent departments to Banner.
As financial information is received for the pertinent departments, the UBIT working papers are prepared and the 990-T form is completed. If the November 15th filing deadline can not be met, Form 8868, Application for Extension of Time To File an Exempt Organization Return, is mailed prior to the November 15th due date.
The University’s UBIT return will be accessible on the Controller’s Office webpage. The Controller’s Office welcomes, from all University departments, questions regarding operating activities that can potentially create unrelated business income. The Controller’s Office continually meets with individual departments to further investigate potential UBIT issues.
Note: all information in this manual is subject to change by the appropriate authority.