Tuesday, June 2, 2009
New Disclosure Demands on Colleges & Universities
A report recently released by the Congressional Budget Office (CBO) has led Senator Charles Grassley (R-IA) to call on Colleges and Universities to disclose how their commercial revenue is used to fulfill their educational purposes. The CBO report titled "Tax Preferences for Collegiate Sports" states that "Colleges and Universities qualify for preferential treatment under the federal income tax law....but concerns have arisen that some activities undertaken are only loosely connected to educating students and might be viewed as unrelated to the schools tax favored purpose." Schools with well known sports programs are the focus as they generate large amounts of commercial revenue and act more like a business than a school. The report raises the notion that this revenue should not fall under the same preferential tax treatment as education related revenue. Senator Grassley wants colleges to disclose how their commercial revenue is used to fulfill their educational mission. "This report shows colleges receive tax benefits that aren't available to private businesses that engage in the same commercial activities" said Grassley.