Revenue generated from a trade or business conducted by a university may be subject to Unrelated Business Income Tax (UBIT). UBIT is a tax that is assessed at corporate income tax rates on the net income from a tax-exempt organization’s unrelated trade or business activities. When a revenue producing activity (RPA) is a trade or business, regularly carried on, that is not related to the University’s mission, it may result in UBIT. Education, research and creative work, service and health care are the basis of UK’s exemption related to its mission.
There are many exceptions and special circumstances that may cause a revenue producing activity to be considered exempt or subject to UBIT. Therefore, departments are required to complete an Initial RPA Questionnaire prior to initiating any revenue producing activities. See BPM E-6-2 for more information.
On an annual basis, department administrators or equivalent unit business officers are asked to complete the Annual RPA/UBI Questionnaire (Qualtrics Survey). Questionnaires are due by September 1st for the prior fiscal year.
Tax Compliance Services