Cornell finances capital projects with various sources of funds, including gifts, operating income, state appropriations, and debt issued in the form of taxable and tax-exempt bonds, notes, and commercial paper. The Internal Revenue Service (IRS) regulations permit nonprofit entities to issue tax-exempt debt contingent upon use of the facilities to further the charitable nonprofit purposes. Cornell has established a Private Use Policy and Guidelines.
Any use of tax-exempt debt funded facilities by or for the benefit of private parties is referred to as “.” IRS regulations set strict limits on the amount of private use permitted in tax-exempt funded facilities: 5% for debt issued by nongovernmental nonprofits.
The University takes advantage of the tax-exempt debt market to obtain lower interest rates for Cornell. The tradeoff is tax-exempt debt has additional compliance procedures required by the IRS. Cornell departments as well as the University Treasurer’s office has a role to play to ensure compliance with private use regulations.
To complete your department annual private use template, please see review the following information:
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