Ohio University

Unrelated Business Income Tax (UBIT)

Ohio University is exempt from paying Federal income tax on income related to the University’s exempt purpose. However, the University also engages in other activities that do not directly relate to the exempt purpose. These other activities are subject to income tax under Section 511 of the Internal Revenue Code. This section of the IRC is designed to prevent tax exempt organizations from having an unfair advantage over for-profit business that do pay tax on income generated in the same manner.

Income of a certain type, or from a certain activity, qualify as exemptions from UBIT. Some exemptions include:

  • Business conducted by volunteers
  • Business conducted for the convenience of OHIO students and/or employees
  • Investment income
  • Rental income
  • Royalties
  • Scientific research

The above list is only an example of possible exceptions. Each item has its own set of rules. For specific information regarding UBIT, please contact Kris Sano (740.597.9933).

UBIT Checklist

Ohio University is required to file an annual Exempt Organization Business Income Tax Return (Form 990-T) with the Internal Revenue Service. Detailed information on all existing and new revenue producing accounts is needed to accomplish this requirement. Departments should complete the Revenue Producing Account Questionnaire (Word) for all new activities and annually for all continuing activities. This form is then used to determine the potential for generating unrelated business income. All completed forms should be sent to Kris Sano.