712.1 – University of North Carolina at Chapel Hill Procedure on Reporting Unrelated Business Income

Introduction

Purpose

The University is required to file an Exempt Organization Business Income Tax Return (Form 990-T) with the Internal Revenue Service reporting any unrelated business income generated by the activities of its academic and support units. The Internal Revenue Code states that a college or university is generally deemed to have unrelated business taxable income when it realizes gross income from any regularly conducted trade or business that is not substantially related to its educational and other exempt purposes. Unrelated business taxable income is also applicable to and reported for state tax purposes.

Procedure

If an activity is being conducted where sales to external customers exist (or otherwise an activity that may be subject to unrelated business income tax), please complete the Unrelated Business Income Tax Compliance Questionnaire and return to Financial Reporting and Management Services at financialreporting@unc.edu.

Related Requirements

External Regulations and Consequences

None.

University Policies, Standards, and Procedures

• Finance Policy 712 - University of North Carolina at Chapel Hill Policy on Unrelated Business Income
• Finance Form 712.1.1f - Unrelated Business Income Tax Compliance Questionnaire

Contact Information

History

Revised:

• December 22, 2011