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CAUT Bulletin Archives

March 2000

IRS Set to Tax Higher Education's Corporate Deals

The U.S. Internal Revenue Service has served notice to American universities and colleges that it may require them to pay tax on revenue arising from commercial deals with soft-drink companies, athletic equipment manufacturers and advertising agencies that have exclusive deals to provide goods and services on their campuses. In new draft regulations, the I.R.S. said that, consistent with longstanding tax law, income may be taxable in cases where the income is not related to an institution's core mission.