This year’s NACUBO Tax Forum was held in Las Vegas on October 20-22.
The annual meeting brings together tax professionals and university representatives from around the country to engage in discussions on subjects that are currently impacting the higher education tax community. Sessions were designed to offer the latest information on issues and best practices in higher ed tax compliance and administration.
This year, several key topics were in focus, including the potential impact of the election on tax policy, issues related to NIL (name, image and likeness), fringe benefit and compensation matters, and common sources of unrelated business taxable income (UBTI).
Many of the sessions over the three-day forum were dedicated to the potential impact of the upcoming elections and the recent bills that have been introduced in Congress that would affect higher education institutions. Summaries of those bills can be found in our earlier articles here and here. While the outcome of the election and its ultimate impact on tax policy is uncertain, speakers at NACUBO fully expect a large tax bill to be drafted and introduced shortly after the election, regardless of which candidate is elected. A new bill will be necessary to address the provisions within the Tax Cuts and Jobs Act that are set to expire at the end of 2025.
NIL is one of the most hot-buttoned topics in the higher education space today. The forum held a session on the history and current rules regarding NIL collectives, organizations that operate independent from colleges and universities but have a large impact on recruiting and retaining student athletes. These groups raise money from a wide variety of individuals and facilitate NIL opportunities for students. In 2023, 81% of the $1.17 billion in NIL opportunities came from collectives. Historically these organizations have been organized as tax-exempt entities, but recently the IRS has found that they serve more a private benefit and not a public interest. In 2024, collectives seeking exemption were denied, and there is now a review of collectives previously granted tax-exempt status.
Fringe benefits and compensation issues are also important topics in the higher ed space. Sessions were held to discuss the taxability and reporting of non-qualified scholarships for students and travel reimbursement for faculty.
The implications of Section 512(a)(6), which provides for the separate computation of taxable income for each trade or business, continues to be a much discussed topic within the higher ed community. Sessions were held to discuss the differences in calculating UBTI before and after Section 512(a)(6) came into effect.
About Schneider Downs Higher Education Services
The Schneider Downs Higher Education industry group is a dedicated team of experienced professionals specializing in serving institutions from high schools to universities. Our experience in audit and assurance, tax advisory, technology and data and more allow our professionals to stay ahead of the latest trends, developments and challenges within the education sector and provide timely and practical solutions to our clients.
To learn more, visit our Higher Education Industry Group page.
