Tax Status and Exemption
The Board of Trustees of Southern Illinois University (“University”) is a body politic and corporate of the State of Illinois created by statute in 1869. The organizing statute is now codified under The Southern Illinois University Management Act. Having been created directly by the State of Illinois legislature, typical corporate organizational documents, such as articles of incorporation, do not exist.
As an instrumentality of the State of Illinois, the IRS recognizes the University as exempt from federal income tax under Internal Revenue Code (IRC) § 115(1). The University’s IRS Determination Letter confirms the University’s tax-exempt status. In addition, the IRS has recognized the University, see University’s Affirmation Letter, as exempt from federal income tax as an organization described in IRC § 501(c)(3) and as a public charity of the type described in IRC §§ 509(a)(1) and 170(b)(1)(A)(ii). The University’s income is also exempt from Illinois income tax. However, the University is subject to federal and Illinois income tax on any unrelated business taxable income it generates. See Unrelated Business Income Tax within the Tax Guide for Academic and Administrative Departments for additional information. The University is also exempt from certain federal, state, and local taxes on goods and services purchased for its own use. See Sales and Use Taxes within the Tax Guide for Academic and Administrative Departments for additional information.
The University is not required to file IRS Form 990. The filing requirements for Form 990 do not apply to a state institution the income of which is excluded under IRC § 115.
Additionally, the University is one legal entity comprised of two operating institutions – Southern Illinois University Carbondale (SIUC) and Southern Illinois University Edwardsville (SIUE). The School of Medicine operates under the Carbondale Campus. As the Carbondale and Edwardsville campuses are component parts of the University, the IRS does not recognize them individually as tax exempt. Instead each campus is tax exempt under the University’s exemption. Should a campus need to prove exemption status, the University’s Affirmation Letter may be provided with the explanation that the campus or school is tax exempt as it is a component part of the University.
Effect on Agency Account and University Related Organizations
Agency account organizations and University Related Organizations exist and operate independently from the University. Agency accounts are funds held by the University as custodian for certain student, faculty, and staff organizations. Agency account organizations and University Related Organizations, such as the foundations, the alumni associations, and the Illinois non-profit corporate outgrowths, are not authorized to use or rely on the University’s federal and state tax-exempt status and special exemptions.
