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County fair board used unfair practice with RV lot

January 4, 2013
The Marietta Times

In 1950, Congress enacted the "Unrelated Business Income Tax" (UBIT) out of concern over unfair competition between taxable businesses and non-profits. The primary function of the UBIT is to discourage unrelated business activity by non-profits. Non-profits should never let their "Unrelated Business" activity reach the point where it starts to look like a commercial business. This is happening in Marietta. The Washington County Fair Board used un-taxed funds and volunteer labor to make improvements to their parking lot RV sites which was then licensed as a commercial RV park. They have moved from providing entities for occasional fairs and events to being a year-round commercial business and still claim to be a non-profit. "Unrelated Business" income could cause the IRS to reconsider a non-profits 501 c 3 status.



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