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UT System Administration Policy Library -- Policy UTS103 Unrelated Business Income Tax

Responsible Officer: Executive Vice Chancellor for Business Affairs
Sponsoring Office: Office of General Counsel and Controller’s Office 
Effective Date: March 1, 1990
Last Reviewed: January 2, 2008
Next Scheduled Review: January 15, 2011
Errors or changes to: policyoffice@utsystem.edu

CONTENTS

 

Policy Statement
Rationale
Scope
Website Address For This Policy
Related Statutes, Policies, Requirements Or Standards
Contacts
Definitions
Responsibilities
Procedures

Forms Tools/Online Processes

Appendix

POLICY STATEMENT

 

Each institution must submit to the Office of General Counsel (OGC) and the Office of the Controller information and data each fiscal year related to all activities (1) with a potential for generating unrelated business income (loss) for a determination of whether the activities conducted by the institutions are unrelated business income reportable and (2) generating unrelated business income (loss) for inclusion in The University of Texas System’s Exempt Organization Business Income Tax Return (Form 990-T).

Accompanying are detailed instructions concerning the form and content of the information and data to be submitted.  These take the form of a non-financial questionnaire and transmittal letter to the Office of General Counsel, and if the activity is determined to generate unrelated business income, financial worksheets, which are used to report the revenue and expenditures related to the activity.

 

RATIONALE

 

 

SCOPE

 

All Institutions and UT System Administration

 

WEBSITE ADDRESS FOR THIS POLICY

 

http://www.utsystem.edu/policy/policies/uts103.html

 

RELATED STATUTES, POLICIES, REQUIREMENTS OR STANDARDS

 

None

CONTACTS

 

If you have any questions about UT System Administration Policy UTS 103, Unrelated Business Income Tax, contact the following offices:

Subject	Office Name	Telephone Number	Email/URL
Non-Financial Questionnaire	Office of General Counsel	512-499-4462
Financial Worksheets	Office of the Controller	512-499-4527
Unrelated Business Income Tax Questions	Office of the Controller Office of General Counsel	512-499-4527 512-499-4462

DEFINITIONS  

 

None

RESPONSIBILITIES 

 

Institutional Tax Coordinator

• Completes a Non-financial Questionnaire for each activity with a potential for generating unrelated business income (or loss) during the current fiscal year.
• Completes a Transmittal Letter listing all new unrelated business activities conducted by the institution during the fiscal year then ended and all unrelated activities from the previous year.
• Completes financial worksheet for all activities that must be included in the UT System’s unrelated business income tax return.

 

Office of General Counsel

• Reviews all Non-financial Questionnaires and makes determination of taxable or nontaxable.

PROCEDURES  

 

 

1. A Non-financial Questionnaire completed for each new activity with a potential for generating unrelated business income (or loss) during the current fiscal year should be submitted for review to the OGC with a copy to the Office of the Controller prior to August 31.  

2.  A Non-financial Questionnaire completed for each activity reviewed in a prior reporting year that was determined to be related to the University’s exempt purpose that has changed its mode or scope of operations during the current fiscal year should be submitted for review to the OGC with a copy to the Office of the Controller prior to August 31.

3.  A Non-financial Questionnaire completed for each activity reviewed in a prior reporting year that was determined to be unrelated to the University’s exempt purpose that has changed its mode or scope of operations to the extent that the activity should now be considered related to the University’s exempt purpose during the current fiscal year should be submitted for review to the OGC with a copy to the Office of the Controller prior to August 31.

4.  A transmittal letter listing all new unrelated business activities conducted by the institution during the fiscal year then ended and all unrelated activities from the previous year should be submitted to the OGC prior to August 31.

5.  OGC shall review all Non-financial Questionnaires submitted to it for review for a determination of whether or not the activity is reportable or exempt.

6.  For those activities determined by the OGC to be includable in the University’s federal tax return, a financial worksheet is to be filed with the Office of the Controller prior to November 15th for the first year of determination and each subsequent fiscal year in which the activity’s status remains unchanged.  The respective Institutional Tax Coordinators will be notified of which activities require financial worksheets.

7.  Exempt Organization Business Income Tax Return (Form 990-T) will be prepared and submitted to IRS.

8. Any income taxes paid with the Form 990-T will be allocated to each institution on the basis of the institution’s contributing income, including any available loss carryovers.

9.  The Executive Vice Chancellor for Business Affairs should be kept informed as to the individual serving as your campus Institutional Tax Coordinator.

FORMS AND TOOLS/ONLINE PROCESSES

 

Non-Financial Questionnaire and Related Forms
General Instructions   

Questionnaire  

Guidelines   

Examples of Possible Unrelated Activities   

Example of Transmittal Letter   

Financial Worksheets
Instructions   

Exhibits A through K  

 

APPENDIX

 

None