Statement of Policy
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 negatively on the university, does not align with its mission statement, or is not in the best interest of the university community's health and safety 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.
Purpose of Policy
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 broader commercial society's pervasive messages. 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 the IRS definition and must be appropriately receipted under the law, departments and organizations must report all gifts received to the Office of Development to ensure accurate accounting and acknowledgment of all university contributions.
To be considered a contribution, a corporate sponsorship payment must include all of the following characteristics:
- A payment received from a business or commercial enterprise,
- A printed or other acknowledgment of the business or commercial enterprise from the university (e.g., included on a sports scoreboard, banner, or other display),
- The acknowledgment may not contain:
- The university’s endorsement of the business entity or its products or services, or
- any qualitative or quantitative language about the business entity’s products or services (e.g., statements or information about the quality or prices of products or services), or
- any information other than business name, logo, address, telephone, and/or Internet address
- The payment received may not be from a vendor due to an exclusive provider arrangement between the university and that vendor.
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:
- A publication is issued more frequently than once per year, and it contains advertising,
- A substantial part of any university employee’s job is devoted to selling advertising,
- The university enters into an exclusive provider contract with a vendor, and the vendor will make one or more payments to the university.
Revenues received are to be classified as advertising revenues if the transaction has any of the following characteristics:
- An endorsement by the university of the business or commercial enterprise or its products or services.
- Qualitative or quantitative language about the business or commercial enterprises’ products or services.
- An exclusive provider arrangement exists between the university and a vendor, and the vendor makes a payment to the university.
Advertising revenues earned by the university are currently subject to Washington State and City of Tacoma B&O tax. They 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 exist (see student newspaper exemption below):
- The publication is issued more frequently than once per year.
- A substantial portion of any employee’s job is devoted to selling advertising.
- The revenues generated are from a payment(s) where an exclusive provider arrangement exists between the vendor and the university.
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. In contrast, 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 students conduct all advertising sales. 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 in section 1.513-1(d)(4)(iv).
The Associate Vice President for Business Services is responsible for advertising at the University of Puget Sound Telephone Directory.
The Athletic Director is responsible for advertising and corporate sponsorship in athletic programs and athletic venues.
The Associate Dean of Students & Director of New Student Orientation is responsible for advertising in the new student orientation magazine.
The ASUPS President, in consultation with the Associate Dean of Students & Director of Union & Programs, 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 in section 1.513-1(d)(4)(iv).
"Advertising” means offering space in a print publication to another party to promote or market 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 occupation tax.
UBIT is a 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
- Solicitation Policy
- Wheelock Student Center Policies and Procedures
- Questions regarding advertising in student media should be directed to the ASUPS Media Board Chair, 253.879.3600.
- Questions regarding the distinction between advertising and corporate sponsorship and the related tax implications should be directed to the Director of Financial Services, 253.879.8620.
- Questions regarding pre-approval for and reporting corporate sponsorship should be directed to the Director of Corporate and Foundation Relations in the Office of Development, 253.879.3610.
- Questions regarding advertising by religious organizations should be directed to the Chaplain, 253.879.2751.
- Questions regarding advertising of student employment opportunities should be directed to the Director of Career and Employment Services, 253.879.3161.
- Questions regarding advertising by pregnancy and birth control agencies that limit legal options' choice should be directed to the Director of Counseling, Health and Wellness Services, 253.879.1555.
- All other questions or concerns should be directed to the Executive Director of Communications, 253.879.3905.
Responsible Manager: Vice President for 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