Unrelated Business Income and Internal Sales

  • 1.  Unrelated Business Income and Internal Sales

    Posted 05-14-2019 16:38
      |   view attached
    Good Evening,

    We are looking to sell/participate in the bid process when departments are looking for large amounts of logo'd merchandise.  For example Student Affairs needed 250 college logo'd t-shirts.  We would call our in town vendor and make it happen.  However, we are being told this needs to go through the purchasing process because we have an unfair advantage because we do not pay tax on our revenues from these shirts, and this is not the normal walk in order by a department only needing a small quantity of what we have on hand.

    Does anyone have any documentation on these internal sales being Unrelated Business Income related sales or not? I have found IRS literature GSM35811 and PLR8025222.

    Thanks - Ray

    Ray Karasek
    Community College of Rhode Island
    Aux Services Business Director
    Warwick RI
    United States