Sales tax is imposed by the State of Florida on the sale of tangible personal property at the retail level. Sales tax does not apply for goods purchased for the University since FGCU is a tax-exempt organization.

Most transactions are taxable unless specifically exempted by law. For example, the following transactions require the collection of sales tax:

• Sales of taxable items at retail level
• Repairs or alterations of tangible personal property
• Rental or lease of personal property
• Rental or lease of real property
• See attached link to Sales Tax Guidelines for detailed listing of taxable and non-taxable (exempt) transactions

The current rate in Lee and Collier County is 6.0%. In Charlotte and Hendry County, the rate is 7.0%.

• Sales and Use Tax Report (DR-15) is submitted to the Florida Department of Revenue on or before the 20th of the month following collection by Finance and Accounting.

For additional information regarding the Florida Sales and Use Tax, please visit the Florida Department of Revenue website at http://dor.myflorida.com/dor.

UBIT is the abbreviation for Unrelated Business Income Tax which is a federal income tax placed on non-profit organizations including state colleges and universities for conducting business activities that are regularly carried on, and not substantially related to their education mission. As colleges and universities became increasingly interested in maximizing revenue from trades or businesses unrelated to their educational mission, Congress passed the Unrelated Business Income Tax of 1950.

Their primary purpose was to give the Internal Revenue Service a means to penalize a tax-exempt organization that conducts unrelated business income activities instead of revoking their tax-exempt status, and to treat colleges and universities similarly as for-profit businesses that pay federal tax and are engaged in the same business activities.

An activity must meet three tests in order to be classified as an unrelated trade or business. It must be:

• a trade or business,
• regularly carried on, and
• not substantially related to the institution's exempt educational or scientific research purposes

An exempt organization that has $1,000 or more or gross income from an unrelated business must file Form 990-T, Exempt Organization Business Income Tax Return. Any net income from such activity is subject to unrelated business income tax, while losses from one unrelated business activity can offset income from other unrelated activities. The University must file Form 990-T with the Internal Revenue Service by November 15th of each year that it has unrelated business income.