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The Internal Revenue Service (IRS) has ruled, at the request of the University, that the University of Minnesota is an “integral part” of the State of Minnesota for federal tax purposes. As such, the University is exempt from federal income tax, except the tax on unrelated business income. Furthermore, the University’s governmental status means that the University is an eligible recipient of charitable contributions for federal income, estate and gift tax purposes. Because the University is a governmental unit, the IRS no longer treats it as an organization described in Internal Revenue Code Section 501(c)(3).

The State of Minnesota follows the federal treatment for income tax. Only unrelated business income is subject to unrelated business income tax (UBIT) imposed by the State of Minnesota. Minnesota also follows the federal treatment for charitable contributions.

Minnesota provides a sales tax exemption for most purchases made by the University. However, the University must collect and remit sales tax on taxable sales it makes. See the sales tax section for more information and exceptions to the University’s exemption.

Links:

Memo explaining the University's Tax Status

This is a helpful memo authored by the University Tax Director which explains the University of Minnesota's tax status as well some of the common implications. You can forward this letter to vendors or grantors.

 

MN Sales Tax

This page contains more information about The University of Minnesota paying and/or collecting Minnesota State sales tax.

 

IRS Support Letter

This letter from the Internal Revenue Service certifies that the University of Minnesota is a tax-exempt entity as an integral part of the State of Minnesota.

 

U of M Tax Status in Other States

The University of Minnesota may be subject to Unrelated Business Income Tax (UBIT) in other states in limited situations. UBIT could apply in a state where the U has unrelated business income and the state imposes a tax on the income. Check with the University Tax Management Office regarding specific income to determine whether tax is due.

The University does not collect and remit sales tax in other states. When a sale is shipped from Minnesota to another state, do not charge tax on the transaction.

 

Foreign Country Issues

Generally, the University’s exemption does not carry over to foreign transactions. However, facts and circumstances may impact whether tax, such as a value added tax (VAT), may be refundable to the University. Consequently, please contact the University Tax Management Office when paying a significant amount of tax in a foreign county.

 

Certification of University Tax Status/Substitute W9 Forms

If a company sends your office a request for a W9 or Substitute W9 form, please DO NOT fill it out yourself. All certifications of the University's Tax Status should be signed by the Tax Director. If the company requests a standard W9, you may download a PDF version already signed here. The bottom of this document includes a fillable form for you to imput your department's specific contact information for vendor reference. NONE OF THE OTHER INFORMATION SHOULD BE CHANGED, with the possible exception of entering your accout numbers if applicable. The address appearing on the top of the form is the official tax address of the University, and must match IRS records.

If a company requests you complete a SUBSTITUTE W9 form, please contact the University Tax Management Office for assistance. We will request you fax or email the form to us along with your own contact information. Please do not forward any mail to the University Tax Management Office without enclosing your contact information.