In general, any commercial-type activity operated by an institution will be subject to Federal income tax if it is:
To be “reportable,” the unrelated business income activity must generate more than $1,000 in income per tax year.
Commonly reportable unrelated business income activities for institutions are listed below. If an institution still questions whether UBI applies to an activity, they should contact their tax advisor or legal counsel.
| Activity | Description |
|---|
| Alumni |
- Mailing list rentals or license fees to outside organizations
- Alumni usage of golf course, recreation center, etc.
- Sale of routine analytical or consulting services to non-institution users
|
| Analytical Laboratory |
- Rental of laboratory facility to non-institution users
- Rental of scientific instruments to non-institution users
|
| Athletics |
- Income from advertising that goes beyond mere acknowledgement of sponsorship
- Income from an athletic event and from the sale of broadcast rights to such events
- Rental of athletic facilities to local independent school districts
- Sale of recreation/activity center memberships to alumni and the general public
- Rental of institution facilities to professional sports teams
- Rental of sports equipment to alumni and the general public
|
| Bookstore |
- Bookstore or gift shop sale of items unrelated to the institution’s exempt purpose
- Mail order catalog sales
|
| Continuing Education |
- Sale of programming services to non-institution users
- Training programs customized to particular users
|
| Endowment |
- Income from mineral operating interests
|
| Food Services |
- Catering (food service) to non-institution users
- Cafeteria/restaurant service to non-institution users
- Franchise agreements with companies like McDonald’s or Chick-fil-A®.
|
| Marine Facility |
- Sale of aquarium collecting services to non-institution users
|
| Mechanical Services |
- Sale of equipment to non-institution users, other than sales of surplus equipment
|
| Media Services |
- Sale of audio-visual services to non-institution users
- Sale of advertising on institution television and radio stations
|
| Medical Services |
- Rental of image analysis equipment to non-institution users
- Pharmacy sales (both prescription and non-prescription) to non-patients
- Sale of ophthalmology services to a private company
- Sale of contact lens services to non-institution users
- Sale of non-kidney-related clinical services to non-institution users
- Sale of paternity evaluation services to non-institution users
|
| Miscellaneous Services |
- Sale of translation services to non-institution users
- Sale of goods to non-profit agencies
- Sale of child care services to non-institution users
- Participation in credit card or long-distance service sales
- Sale of computer services to non-institution users, non-profit research institutes, and government agencies
- Travel agency commissions and fees paid by non-institution users
- Sale of cell phone exchange services to non-institution users
- Sale of printing services to non-institution users
|
| Publications |
- Sale of advertising space in periodicals
Note: This excludes “circulation income,” which includes amounts realized from reprints of articles and the sale of back issues, if the content of the publication relates to the accomplishment of the institution’s exempt purposes.
|
| Special Events |
- Sale of tickets to the general public for art exhibits, programs, concerts, or “non-educational” tours
|
