While most income generated by the University of Illinois System is exempt from income tax, certain activities may generate unrelated business income (UBI) that is subject to tax assessments by the IRS, the State of Illinois, and potentially other states.
Below are common examples of activities that may generate unrelated business income tax (UBIT) obligations. However, keep in mind that whether an activity generates taxable unrelated business income depends on the specific facts and circumstances. These examples are intended to raise awareness and may require further review:
- Selling advertisements or non-qualified sponsorships to customers external to the System.
- Renting space and providing services to customers external to the System (for example, renting facilities and providing services for a wedding).
- Renting equipment or other personal property to customers external to the System.
- Selling tickets to commercial theater or entertainment events.
- Selling access to campus recreational facilities to individuals not affiliated with the University of Illinois System (such as alumni).
- Selling routine testing services.
For additional guidance and examples of UBI-generating activities, please refer to Section 18.13 of the Business and Finance Policies and Procedures.
Contact
If you have questions regarding UBIT, refer to the applicable subject matter experts by searching for “UBIT” in the Business & Finance Who to Ask list.
You can also contact the University of Illinois System’s tax experts within Treasury Operations, Tax Compliance and Analysis, at (217) 244-8359.
