While most income generated by the University of Illinois System is generally tax-exempt, did you know that the IRS imposes a tax on any unrelated business income (UBI) generated by regularly carried-on business activities which are not related to the U of I System’s tax-exempt purpose?
See below for some common examples of activities that could potentially lead to unrelated business income tax (UBIT) assessments, assuming they are regularly carried-on and unrelated to our tax-exempt mission:
- Renting equipment or personal property to customers external to the U of I System.
- Renting space and providing services to customers external to the U of I System (such as space rentals and services sold to an external customer for their wedding).
- Selling tickets to commercial theater and entertainment events.
- Selling access to campus recreational facilities to unrelated individuals (such as alumni).
For further details and examples of UBI activities and UBIT requirements, refer to Section 18.13 of the Business and Financial Policies and Procedures.
If you have any questions related to this topic, refer to our applicable subject matter experts within the UBIT section of UAFR’s Who to Ask list.
In addition, you can also contact the U of I System’s tax experts within Treasury Operations, Tax Compliance and Analysis at (217) 244-8359.