Examples of Possible Unrelated Business Activities

Activity Description
Alumni Activities Mailing list rentals to commercial organizations

Alumni usage of golf course, recreation center, etc.

Analytical Laboratory Sale of routine analytical services to non-university users

Rental of laboratory facility to non-university users

Rental of scientific instruments to non-university 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 will be nontaxable related income — Rev. Rul. 80-296, 1980-2 C.B. 195

Book Stores Gift shop or book store sales of items unrelated to the university’s exempt purpose (Whether or not such sales fall under the “convenience” exception depends upon whether the store is used primarily by the university community vs. the public at large; whether the articles are “expendable”; and whether the store is located in an area convenient to other commercial facilities selling similar products)

Mail order catalog sales

Business Administration, Arts, Management, etc. Sale of advertising space in periodicals (Note: if there is both advertising and circulation revenue, tax is paid on the lower of the net advertising revenue or net combined advertising/ circulation revenue. If there is no advertising revenue, no tax is paid on circulation revenue.)
Center for Magnetic Recording Research Sale of translation services to non-university users
Central Stores Sale of goods to non-profit agencies
Child Care Center Sale of child care services to non-university users
Commercial Services Promotion Affinity credit card or long-distance service sales participation
Computer Center, Academic Computing, Computer Sciences Sale of computer services to non-university users

Sale of computer services to non-profit research institutes and government agencies

Sale of programming services to non-university users

Continuing Education Training programs customized for particular users (as distinguished from presentation of educational material of general application)
Electron Microscope Rental of electron microscope facility to non-university users
Endowment Income from mineral operating interests
Food Services Catering (food service, etc.) to non-university users

Cafeteria/restaurant service to non-university users. (Note: The operation of campus soft drink and food vending machines and laundromat facilities will be nontaxable under the “convenience” exception — Rev. Rul. 81-19, 1981-1 C.B. 353)

Franchise Revenue Franchise agreements such as with McDonald’s
Machine Shop Sales of equipment to non-university users
Marine Facility Sale of aquarium collecting services to non-university users
Media Resources Sale of audio-visual services to non-university users

Sale of advertising on university television and radio stations

Medical Neurosciences Image Analysis Rental of image analysis equipment to non-university users
Medical Pharmacy Pharmacy sales (both prescription and non-prescription) to non-patients
Ophthalmology Sale of ophthalmology services to a private company

Sale of contact lens services to non-university users

Physical Education – Athletic Facilities Rental of athletic facilities to local Independent

School Districts

Printing and Reprographics Sale of printing services to non-university users
Recreational Sports/Activity Center Rental of recreation equipment to the general public and alumni

Sale of recreation/activity center membership cards to the general public and alumni

Special Events Center Sale of tickets to concerts for the general public (Note: Income from operating a performing arts theater or sponsoring symphony concerts open to the public and employing professional performers will be nontaxable because these contribute importantly to the overall educational function of a university — Reg. 1.513-1(d)(4)(iv) (Example (2) (1987))
Summer Sports Training Camp Rental of campus facilities to professional sports teams
Telephone Commissions received from long distance carriers
Tissue Typing Lab Sale of cell exchange services to non-university users when available generally

Sale of non-kidney related clinical services to non-university users

Sale of paternity evaluation services to non-university users

Travel Center Travel agency operation for non-university users

Conducting tours which are not educational

Return to section 10.0 “Unrelated Business Income Tax”

Return to Appendix B