Yetman: Academic Research and the Unrelated Business Income Tax

Robert J. Yetman (UC Davis Graduate School of Management) has published a book chapter titled The taxation of nonprofit organizations: academic research and the unrelated business income tax in the Research Handbook on Nonprofit Accounting (Edward Elgar Publishing 2023). Here is the abstract:

Nonprofit organizations in the United States do not generally pay income taxes on net profits, but they are subject to Unrelated Business Income Tax on net profits from activities unrelated to their primary charitable mission. Taxable activities are common, particularly among larger organizations. Often these taxable activities utilize the same assets and personnel as an organization's tax-exempt mission-related activities. Operating taxable unrelated activities alongside tax-exempt activities can create difficult choices regarding how much taxable revenues to earn, and how aggressively to avoid taxes. Research in this area is nascent. A recent change in laws has made nonprofit tax returns publicly available. Data availability will allow researchers to expand our understanding of how this income tax affects the choices made by and operations of nonprofit organizations.

Lloyd Mayer