The Changing Landscape of Unrelated Business Income Tax

The Tax Cuts and Jobs Act significantly altered our Tax Code, affecting individuals, for-profit organizations, and nonprofit organizations alike. This article discusses particular changes under the Act specific to unrelated business taxable income (“UBTI”). The new legislation provides that UBTI from each unrelated business must now be calculated separately, a requirement which is increasingly known as “siloing”. 

State Sales Tax Liability in Wayfair’s Wake

Are nonprofits that sell goods liable for state sales tax, like for-profit businesses? And does the answer change if sales are made via the Internet? Nonprofits may indeed owe state sales tax for their sales, depending on their specific activities and extent of available state nonprofit exemptions. In the wake of the U.S. Supreme Court’s June 2018 South Dakota v. Wayfair, Inc. decision, such liability may include online sales – for both businesses and nonprofits. This is huge news for giant retailers like Wayfair and Amazon, but what does it mean for nonprofit sellers?

Schedule B Roll-Back: Newsworthy, But Not So Much for 501(c)(3)’s

The IRS’s announcement on July 17, 2018 that it will no longer require Form 990 Schedule B donor disclosures sent shock waves through the tax-exempt sector. While such action reflects notable government restraint and certainly affects many tax-exempt organizations, there is no change for Section 501(c)(3) organizations that file Form 990s or for Section 527 “political action committee” (PAC) reporting. So why the change, and what are its implications?