A university's tax-exempt status is granted based on its mission to educate and perform research. All activities substantially related to this mission are free from taxation. An unrelated trade or business activity is one that is:

• Not substantially related to the exempt mission of the institution
• Regularly carried on with frequency or continuity
• Conducted for the production of income
• Pursued in a manner similar to comparable commercial activities of for-profit organizations

Income from unrelated activities may be subject to the unrelated business income tax (UBIT), unless it meets one of several exclusions. For example, a college may operate a ski facility for use in its physical education program and also for recreational use by members of the public who pay ski-lift fees comparable to those charged at nearby facilities. The income from public use is unrelated business income subject to tax.

Towson University is required to file an Exempt Organization Business Income Tax return annually. If you or your department is responsible for an activity that may be subject to UBIT reporting, please contact Financial Services as soon as possible.

Contact Deborah Asbury, University Comptroller, by phone: 410-704-3728

or e-mail dasbury@towson.edu