The University of Massachusetts has issued a number of tax-exempt bonds through the University of Massachusetts Building Authority, the Massachusetts Health and Educational Facilities Authority (now MassDevelopment), and through a number of stand-alone Master Lease Agreements. As a result of utilizing tax exempt financing, the University is bound by certain laws and regulations as promulgated by the Internal Revenue Service.
Private business use is one component of the University’s obligations with respect to tax-exempt transactions. Facilities financed with tax-exempt financing must be monitored on a consistent and regular basis throughout the life of the financing to ensure compliance with the tax-exempt private business use rules. For each tax-exempt debt issuance, the University is required to record, update and retain private business use activity documentation to substantiate tax compliance.
The following document provides a general overview of private business use:
For reference, the following IRS documents address private business use: