BCFC Requests Examples of UBIT and Unfair University Competition with the Private Sector

The Business Coalition for Fair Competition (BCFC) requests examples of your clients, members, or organization's experience(s) from unfair university competition with the private sector, including small business.

Yesterday, the House Ways and Means Oversight Subcommittee held a hearing on the Internal Revenue Service (IRS) Colleges and Universities Compliance Project which covered the unrelated business income tax (UBIT) for which tax-exempt entities, such as most colleges and universities, are required to pay on any activities and revenue unrelated to their tax-exempt status. For the college and university community, these activities typically can be classified as any activity revenue outside of their direct roles in research and education. Subcommittee Chairman Charles Boustany (R-LA) listed examples such as gyms, golf courses, facility rentals, etc. The April 25, 2013 IRS Report and according to this news article, "found increases to unrelated business taxable income for 90 percent of the colleges and universities examined, totaling about $90 million. There were over 180 changes to the amounts of unrelated business taxable income reported by colleges and universities on Form 990-T; and disallowance of more than $170 million in losses and net operating losses that could amount to more than $60 million in assessed taxes."

For more information and other examples on UBIT, please review the February 14 BCFC Testimony before the Full House Committee on Ways and Means.

To help Chairman Boustany and the House Committee on Ways and Means explore this issue in more detail as well as to help enact a legislative or regulatory solution to this ongoing problem, please submit your examples to John"JB" Byrd, BCFC Government Affairs Manager.