Do colleges and universities pay taxes?

Answer 1

Yes but not in the way we do.

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** There are for profit institutions
** of higher education that
** pay taxes like any other company.
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* There are colleges and Universities
* that are owned by the government
* such as state institutions.
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These are exempt from taxes but must pay for services received fro surrounding communities. They usually run their own police department and other services that town or city otherwise would.

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** There are independent
** private colleges that are
** not for profit corporations or NGOs
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These are usually treated like State Institutions but will have to pay taxes on investment property and no mission enterprises.

Answer 2

A public college or university is tax-exempt as a public charity.

A private college or university has to obtain the classification of "charity" from the IRS in order for income received for educational activities to be tax-exempt.

A private college or university that is run for profit (such as the U of Phoenix) pays taxes the same as any other business.

Answer 3

If your Q is regarding income taxes ... the answer is NO. Colleges and universities (public or private) are exempt by statute under code section 501(c)3.

Can they be subject to income tax? Yes, but in limited areas. Basically, what is called UBTI (unrelated business taxable income). If they operate a business that is unrelated to their charitable purpose, that competes with the general businesses, then it can be subject to income tax.

Answer 4

Generally they are tax-exempt on activites directly related to their mission. For-profit schools do pay taxes though.