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Unrelated Business Income Tax Definition

Defining Unrelated Business Activities

Unrelated business activities generally involve providing services or products to individuals or entities who are not affiliated with the University (i.e., non-UC groups and corporations, and those who are not University students, faculty and administrative personnel).

Unrelated business activities are revenue-producing and taxable activities that are:

  • Not directly related to achieving the University's educational and research missions.
  • Conducted for the primary purpose of earning a profit.

These activities may be subject to unrelated business income tax (UBIT), which is imposed at the same tax rates applicable to for-profit corporations. For a complete explanation of unrelated business activities see BFB A-61; Unrelated Business Income and Expenses.

Units operating unrelated business activities  are required to contact Tax Reporting and Compliance.   

Unrelated Business Income

Activities that are determined to produce Unrelated Business Income/Loss (UBI) will be included in the university's consolidated Exempt Organization Business Income Tax Return (Form 990-T), to be prepared each year for submission to the Internal Revenue Service.