Puget Sound welcomes corporate support and advertising in university publications subject to the following guidelines:
Puget Sound will not accept advertising or corporate sponsorship that reflects in a negative manner on the university, does not align with its mission statement, or is not in the best interest of the health and safety of the university community as determined by decision-making parties listed below.
Puget Sound does not accept advertising or corporate sponsorships for certain categories of products and services, including alcohol products, illegal drugs and drug paraphernalia, weapons, tobacco products or establishments, sexual escort services, gambling opportunities or casinos, weight loss products or plans, check cashing services and credit cards.
The university does not accept advertising or corporate sponsorship acknowledgments on the www.pugetsound.edu website.
The university does not endorse, directly or by implication, any products, services or ideas advertised except those sponsored directly by the university.
As a residential, liberal arts college, Puget Sound seeks to provide an educational environment in which teaching and learning can occur relatively free from the pervasive messages of the broader commercial society. The advertising and corporate sponsorship policy is designed to guide decision-making for university personnel who are approached by external advertisers or sponsors who want to access the campus community and for departments and programs seeking supplemental revenue to support university activities from external advertisers or sponsors. The policy also is designed to be mindful of the university’s status as a nonprofit organization under the law.
University departments or organizations, including those registered with or recognized by the Associated Students of the University of Puget Sound, must receive approval from the Office of Development before gifts are solicited. Because corporate sponsorships are charitable contributions by IRS definition and must be appropriately receipted under the law, departments and organizations must report all gifts received to the Office of Development in order to insure accurate accounting and acknowledgment of all contributions to the university.
To be considered a contribution, a corporate sponsorship payment must include all of the following characteristics:
If the above characteristics are not all met, then the payment is considered advertising revenue according to tax laws and regulations (see tax implications below).
To ensure the university’s compliance with applicable tax laws and regulations, the responsible department head is required under this policy to notify the Director of Accounting & Budget Services about advertising activity if any of the following conditions exist:
Revenues received are to be classified as advertising revenues, if the transaction has any of the following characteristics:
Advertising revenues earned by the university are currently subject to Washington State and City of Tacoma B&O tax and should be classified as miscellaneous service revenue (account 58040), so the applicable tax can be calculated and paid.
Net income from advertising revenue (e.g. advertising revenue less related expenses) is currently subject to federal UBIT if any of the following conditions exists (see student newspaper exemption below):
Tax implications of advertising and corporate sponsorship revenue
For revenue classification and tax purposes, a distinction is made between corporate sponsorship and advertising revenues. Corporate sponsorship revenue is considered contribution revenue not subject to tax, whereas advertising revenue is subject to both Washington and Tacoma B&O tax, and may be subject to federal UBIT depending on the facts and circumstances.
Student newspaper exemption
The Internal Revenue Services (IRS) regulations provide an exemption from federal UBIT for student newspapers (i.e. The Trail), provided that all advertising sales are conducted by students. Other publications may fit within this exemption, provided that the purpose of the publication or program includes the instruction of students (e.g. the students working on the staff of The Trail are learning to run a newspaper). The authoritative reference for this is from the IRS regulations at section 1.513-1(d)(4)(iv).
The Athletic Director is responsible for advertising and corporate sponsorship in athletic programs and athletic venues.
The Associate Director for Student Activities is responsible for advertising in the new student orientation magazine.
The ASUPS President, in consultation with the Associate Dean for Student Development, is responsible for corporate sponsorship of ASUPS-sponsored activities.
The Executive Director of Communications is responsible for advertising in other university publications.
The Director of Corporate and Foundation Relations is responsible for corporate sponsorship of other university activities.
Regulatory or Authoritative references
The authoritative reference for the student newspaper exemption is the IRS regulations at section 1.513-1(d)(4)(iv).
"Advertising” means offering space in a print publication to another party for the purpose of promoting or marketing any trade or business, or any service, facility or product. Advertising includes messages containing qualitative or comparative language, price information or other indications of savings or value, an endorsement, or an inducement to purchase, sell, or use any company, service, facility or product.
“Corporate sponsorship” means accepting a contribution from a business or commercial enterprise in exchange for a printed or other acknowledgment that is limited to only the business name, logo, address, telephone, and/or Internet address.
B&O tax is business and occupations tax.
UBIT is federal unrelated business income tax.
Related Documents, Forms and other related policies
Campus Facility Use Policy for External Groups
Political Activity Policy & Guidelines
Student Fund-raising Activity Policy
Wheelock Student Center Policies and Procedures
Responsible Manager: Executive Director of Communications and Vice Presidents
Approved by: President
Date Originated: October 7, 2003
Date Last Modified: January 13, 2004
Date Last Reviewed:
Frequency of review: Annually or more frequently as needed.
To whom this policy applies: All university managers responsible for advertising activity related to university print, graphic, or electronic publications