A liability exists for federal and state income taxes on unrelated business income after the deduction of reasonable, allowable and allocable expenses. Corporate or industry contracts generally involve a quid pro quo , i.e. something is given and something is received. These agreements must be entered into in the name of The University of Iowa and not in the name of the Department or Principal Investigator. Neither The University of Iowa Foundation nor other external entity is permitted to accept payment for activities related to corporate and industry sponsored research projects conducted within the University. Students or trainees involved in the project will have specific tasks and duties.
Investigators are free to publish findings in a timely manner.
In order to account for corporate and industry sponsored projects as an exempt activity, the University must document the relatedness of project activities to the tax-exempt purposes of the University in advance of the assignment of an account . The principal investigator will develop a Research Project Profile for each corporate or industry sponsored project prior to the establishment of a University account and the initiation of the project. The purpose of the profile is to document the relationship of the sponsored project to the mission of the University. An account will not be established until the profile is received and evaluated by the University Controller or designee to determine if the account to be assigned will be within the UBIT subject series of accounts or in a tax-exempt series. Investigators are encouraged to charge up to the federally approved rate.