Date:           March 15, 1996		Code:        AD 96-08



To:		Vice Presidents for Administration


From:		George A. Pardon		
		 Accounting Director
		 Business and Finance


Subject:	Unrelated Business Income Information Package and Worksheets 


Preparing for the first filing of the income tax return for the CSU will be an additional 
workload for campuses requiring a significant amount of reading to comprehend the issues 
and analysis of existing campus operations.  Once the return has been filed for fiscal year 
1995/6, it is highly likely that it will be audited.  Thus, it is critical that each campus is 
committed to submitting information that is accurate, timely and consistent with the Internal 
Revenue Code.

The following information highlights important steps in the process of preparing the tax 
return as well as identifying critical campus deadlines.

-	Tax Coordinator Worksheet			DUE:	April 1, 1996

	This form will identify the campus personnel responsible for coordinating the 
	campus tax reporting process.  Requests for additional information and 
	clarifications will be sent directly to this person.

-	Revenue Analysis Questionnaire/Summary Report	DUE:	May 31, 1996

	All campus revenues should be reviewed to determine if they are taxable.  A 
	questionnaire should be prepared for all revenues that are not clearly exempt from 
	taxes.  The questionnaire will assist the campus in determining and documenting the 
	tax status of each revenue source.  The Revenue Analysis Summary Report should 
	include all activities determined to be taxable by the campus and submitted to the 
	Chancellor's Office.

-	Unrelated Business Income Tax Worksheet		DUE:	September 30, 1996

	This worksheet will be prepared for each taxable revenue identified by the campus 
	Revenue Analysis Questionnaire.  This worksheet documents the amount of 
	revenues and any allowable deductions and provides an audit trail to the Financial 
	Records System.  This worksheet will follow the basic format of the federal form 
	990-T (see Section II B).  Copies of the worksheet and instructions will be sent to 
	the campuses once the Revenue Analysis Summary Reports have been reviewed by 
	the Chancellor's Office.

Once the tax liability has been calculated, the Chancellor's Office will send a tax bill to 
the campuses.  These assessments will be based on each campus' net taxable income.  
Campuses must remit taxes due immediately upon receipt of their bill.  These funds must 
be received in time for the finalized return to be postmarked before the November 15, 1996 
due date.

The attached informational package provides detailed information about the process through 
the May 31 due date.  Based on the information provided in the package, campuses should 
begin identifying the mechanism for collecting the data due September 30 for inclusion in 
the tax return.

If you have any questions, please contact Mr. Bill Musselman at (310) 951-4610 or E-Mail 
at william_musselman@qmbridge.calstate.edu.


 GAP:WPM:js AD 96-08


Attachment-- Attachments




Distribution: (w/ Att.)

	Presidents
	Financial Managers
	Accounting Officers
	Mr. Richard Ludmerer, General Counsel
	Mr. Bill Musselman, Cash and Asset Manager
	Mr. Richard P. West, Vice Chancellor - Business and Finance