Tax-exempt organizations are required to pay tax at the corporate or trust rate on the income generated from any trade or business activities unrelated to the entity's tax exempt purpose.

Question

Quizplus · Accepted Answer

This is known as unrelated business income tax (UBIT) and is a tax imposed on tax-exempt organizations for income generated from activities not related to their exempt purposes. The tax rate is the same as the corporate tax rate or trust tax rate, depending on the type of organization.

Tax-Exempt Organizations Are Required to Pay Tax at the Corporate