Approved by the Engineering Practice Policy Committee on January 21, 2021
Approved by the Public Policy and Practice Committee on May 6, 2021
Adopted by the Board of Direction on July 16, 2021


The American Society of Civil Engineers (ASCE) supports preservation of the existing unrelated business income tax (UBIT) statute, as well as increased Internal Revenue Service (IRS) enforcement of the current UBIT rules.


As defined by the IRS, for most tax-exempt organizations an activity is an unrelated business (and subject to unrelated business income tax) if it meets three requirements:

  • It is a trade or business.
  • It is regularly carried on. 
  • It is not substantially related to furthering the exempt purpose of the organization.  

Congress has periodically reviewed the unrelated business income tax statute, which has served to define the unrelated business activities of tax exempt organizations since 1950. These reviews have focused on the scope and nature of tax exempt organizations' income producing activities, the administration of the unrelated business income tax by the IRS and the courts, and the extent of compliance with the law. The review included examining the "relatedness" test, which determines if an income producing activity is related to the organization's tax exempt purpose. It also included consideration of the "unfair competition" charge of some small businesses, which claim that tax exempt organizations can undercut the prices of goods or services provided by tax paying businesses.


Non profit organizations such as ASCE have been accorded tax exempt status in recognition of the valuable role they play in society. ASCE, for example, provides invaluable contributions to the nation's technological and economic well-being through educational services and by promoting technical expertise and quality performance in the civil engineering profession. Changes in UBIT could adversely affect the way ASCE operates financially by taxing income that would otherwise be invested in on-going programs.

ASCE Policy Statement 325
First Approved in 1987