Some colleges may host “conferences” with registration fees and exhibitor income.  Is this UBIT?


Denali Christian College (DCC) is a private college exempt under Internal Revenue Code section 501(c)(3) and section 170(b)(1)(A)(ii).  They are required to file Form 990 annually.  In a conversation with DCC’s CFO, we find that they are hosting a conference this summer – “Alaska:August:ACTS” – wherein they’ll receive revenues from registration fees, exhibitor booth rentals, and some food/snack sales.  Additionally, there is an option for participants to attend via the internet.

We tell them that they may be able to meet the UBIT exception for “conventions and trade shows.”  In order to accomplish this, the educational content of the conference/convention should be within their stated exempt purpose and they should hold the conference at least annually.  Also, an “internet convention” (with exhibitor content) cannot stand alone, but must coincide with and/or overlap the physical conference.


From IRS Publication 598:

Convention or trade show activity. An unrelated trade or business doesn’t include qualified convention or trade show activities conducted at a convention, annual meeting, or trade show.

A qualified convention or trade show activity is any activity of a kind traditionally conducted by a qualifying organization in conjunction with an international, national, state, regional, or local convention, annual meeting, or show if:

  • One of the purposes of the organization in sponsoring the activity is promoting and stimulating interest in, and demand for, the products and services of that industry or educating the persons in attendance regarding new products and services or new rules and regulations affecting the industry; and
  • The show is designed to achieve its purpose through the character of the exhibits and the extent of the industry products that are displayed.

For these purposes, a qualifying organization is one described in section 501(c)(3), 501(c)(4), 501(c)(5), or 501(c)(6). The organization must regularly conduct, as one of its substantial exempt purposes, a qualified convention or trade show activity.

From Treasury Regulation 1.513-3(d)(1):

(d) Certain activities.

(1) Rental of exhibition space. The rental of display space to exhibitors (including exhibitors who are suppliers) at a qualified trade show or at a qualified convention and trade show will not be considered unrelated trade or business even though the exhibitors who rent the space are permitted to sell or solicit orders.

Bottom Line

  • Revenues from a “conference” may meet the UBIT exception for Conventions and Trade Shows.
  • The college should document the fact that it is educating attendees/participants in an area that is integral to their exempt purpose.
  • The exhibitors should align with the educational purpose of the conference.
  • The college should “regularly conduct” this conference as one of its substantial exempt purposes (denoted on its Form 990 – and other places).
  • “Internet conventions” cannot stand alone – but must coincide with a physical conference.

Specific questions? Email Dave Moja.

The information provided herein presents general information and should not be relied on as accounting, tax, or legal advice when analyzing and resolving a specific tax issue. If you have specific questions regarding a particular fact situation, please consult with competent accounting, tax, and/or legal counsel about the facts and laws that apply.