The Tax Compliance Officer works with several departments on campus that has oversight of the various aspects of tax-exempt debt. As needed, the Tax Compliance Officer will perform reviews of Private Business Use relating to tax-exempt debt issuances.
Private Business Use is the use (directly or indirectly) of facilities financed by tax-exempt bonds in a trade or business carried on by a nonqualified user. A qualified user is a state or local governmental unit described in Section 501(c)(3) of the Internal Revenue Code using the facilities in accordance with its tax-exempt purpose.
Excessive private business use of the proceeds of facilities financed with tax-exempt bonds may cause the interest on the tax-exempt bonds to be taxable to the bondholders.
Types of Activities That Generate Private Business Use
- Actual or beneficial use pursuant to:
- Management or service contracts,
- Research agreements,
- Special legal entitlements,
- Special economic benefit to a nonqualified user.
Exceptions To Private Business Use
- General public use,
- Temporary use,
- Incidental use; and
- Qualified improvements to existing property.