Tax Reform Could Impact Colleges’ Unrelated Business Income
November 29, 2017
If the proposed tax reform passes the Senate, colleges could lose their exemption from tax on certain income not connected to their academic mission. The proposal calls for expanding the unrelated business income tax and would include licensing royalties generated from the use of an institution’s name or logo. Colleges and universities with more than one unrelated business activity would also have to calculate the net income or loss from each activity separately and would not be able to offset income from one activity with loss from another. Several higher education groups believe the tax reporting changes could be burdensome and create unintended consequences.