Legal Topics- Tax Issues

Although the University is a tax exempt organization, it is faced with many tax issues. These include issues in the areas of income tax, employment taxes, property taxes, sales tax, excise tax, and other miscellaneous taxes. The University is generally exempt from federal income tax because it is an instrumentality of the State of Ohio. It is not a 501(c) (3) organization (the section that exempts private charities such as private universities). Even though the University has an exemption from federal income tax, it must still pay tax on its unrelated business income. Departments or units generating revenues from outside sources should contact Steve Hoffman in the Controller's office to determine whether the revenues being generated may produce unrelated business income.

Compensation and benefit issues often involve tax implications. Generally, all amounts given to employees by the University are considered taxable compensation and must be reported on the individual employee's Form W-2. As with many tax rules, there are exceptions that permit employees to receive limited tax free benefits. Departments and units should contact the Office of Human Resources to determine if any benefits they are offering employees fit within any of the exceptions.

All purchases made by the University are exempt from Ohio Sales and Use Tax. Sales of services by the University are exempt from Ohio Sales and Use Tax; however, sales of tangible personal property are taxable. Any department or unit making sales of tangible personal property must have a vendor's license and must charge and collect sales tax on all sales made to purchasers within the state of Ohio. Dave Jones in the Treasurer's Office should be contacted for more information on sales tax reporting.

The Office of Legal Affairs does not provide individual tax advice to University employees. A number of the links below provide additional information on tax matters and may be helpful.

Controller's Tax Manual
http://www.ctlr.ohio-state.edu/webhelp/Financial_Policies.htm

Payroll tax information
http://hr.osu.edu/payroll/tax.htm

Internal Revenue Service
http://www.irs.gov/

IRS Forms and Publications
http://www.irs.gov/formspubs/index.html

Tax benefits for education
http://www.irs.gov/publications/p970/index.html

Tax guide for aliens
http://www.irs.gov/publications/p519/index.html

IRS tax information for students
http://www.irs.gov/individuals/students/index.html

Determining the value of donated property
http://www.irs.gov/publications/p561/index.html

Ohio Department of Taxation
http://tax.ohio.gov/

Directory of Ohio municipalities
http://www.columbustax.net/Muni_List/index.asp

Regional income tax agency
http://www.rita.to/

City of Columbus tax
http://www.columbustax.net

Franklin County Auditor
http://www.co.franklin.oh.us/auditor/index.shtml

Princeton FAQ in taxation for students
http://web.princeton.edu/sites/ogc/tax2005/FrequentlyAskedQuestions.htm

UMich FAQ on charitable giving
http://www.ogc.umich.edu/faq_charitable.html

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Legal Topics- Tax Issues