This reminder is directed to anyone who is responsible for an activity which generates revenue (other than tuition and fees) for the University of North Texas or the University of North Texas System Administration.
The University is required to file an annual income tax return (IRS Form 990-T) for any "unrelated business income" generated by the University during the year from September through August.
The Internal Revenue Service defines any income that is: 1) from a trade or business, 2) regularly carried on, 3) and not substantially related to the organization's exempt purpose, to be "unrelated business income." The fact that the revenue is used for related purposes is not relevant to determine whether the revenue is related or not. Generally, this would involve any income that is not derived from education or research activities, although there are exceptions to this. The IRS also provides exclusions for some types of income that would otherwise be considered unrelated.
Specific examples of exclusions involve activities involving a volunteer workforce, goods and services provided for the convenience of the faculty, staff, and students of UNT, qualified sponsorships, and sales of donated merchandise. Other types of income such as dividends, interest, royalties, rents from real property, and income from research are also generally excluded with some exceptions.
In general, if your department is already reporting unrelated business income, you may disregard this email. However, if your department generates revenue in addition to ordinary tuition and fees, if you have not already done so, please email the University Tax Accountant at jim.webb@unt.edu to receive a copy of UNT’s Unrelated Business Income Tax Questionnaire. Please complete the appropriate sections for any potential unrelated income generated by your department and return to the Payroll Office in Marquis Hall 127. If you prefer, you may also email the form to jim.webb@unt.edu or fax to x7770.
If it is determined that the income in question is in fact unrelated business income based on the IRS criteria, you will be required to send a report of that income and all related expenses to the Payroll Office no later than November 30th of each year reporting the prior fiscal year's September 1 through August 31 income. An example of the general format for this report is available. Of course, the format can be modified to suit the particular department as necessary. The expenses listed are only examples. Your department's expenses will likely differ from those listed.
This information is critical to ensure UNT's compliance with IRS tax rules relating to unrelated business income tax. Please feel free to contact me should you have any questions.
Thank you,
Jim
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Jim Webb
Tax Accountant/Assistant Director Payroll
University of North Texas
Payroll Office
PO Box 310949
Denton, TX 76203-0949
Phone: 940-369-7014
Fax: 940-369-7770
jim.webb@unt.edu
GO MEAN GREEN!
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