To: University Business Managers
From: David Blakemore, Director of Financial Reporting & Management Services
Date: June 10, 2008
The University, through the Financial Reporting Department of the Controller’s Office, reports taxable Unrelated Business Income (UBI) as required by the Internal Revenue Service Code and Regulations. The University policy regarding UBI can be found in the Accounting Services section of the Business Manual, Policy 22.
Revenues derived from goods sold or services performed by units to unrelated parties, i.e., non-University customers, may be subject to federal income taxation as UBI when that sale or service constitutes a regularly carried on trade or business that is not substantially related to the University’s educational mission. To determine ‘relatedness,’ the Internal Revenue Code focuses on the nature of the activity.
Therefore, if a department is uncertain whether revenue from a non-University customer is related to the University’s educational mission, the department should complete the UBI Tax Questionnaire. The department may return the completed questionnaire to Nancy Brock, Assistant Director of Financial Reporting, either by campus mail box 1270 or by email at nbrock@email.unc.edu. If you have any questions, please contact Nancy at 919-962-1362 or by the email address noted above.