Monday, March 4, 2019

The Tax-Exempt Status of Universities and Colleges

    In their article, the Association of American Universities discusses the tax-exempt status of universities and colleges. They start the article by explaining why universities are exempt from federal income taxation. Universities and colleges are for educational purposes which is recognized by IRC Section 501(c)(3), which gives organizations tax-exempt status. Private universities and foundations also qualify for tax-exempt status. This is because private universities and foundations meet the requirements of IRC Section 501(c)(3), which includes “corporations, and any chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes…” The article continues by explaining how the tax-exempt status of universities benefit society. They explain that the educational purpose of universities and colleges have been recognized in federal law as critical to the well-being of our democratic society. Their tax-exempt status allows universities and colleges to make the most of their revenues and allows them to maximize their educational benefits they provide society. Some of these benefits include: an educated citizenry which is essential to our democracy; a highly-educated, skilled, and productive workforce which is critical to our nation’s competitiveness; and new innovations and technologies that improve our quality of life, strengthen our security, and fuel economic growth. To learn more about the tax-exempt status of universities and colleges, click here

 

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https://lawprofessors.typepad.com/nonprofit/2019/03/the-tax-exempt-status-of-universities-and-colleges.html

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