Overview: Selling Goods and Services
Departments generate income by producing a product or providing a service for which a fee is charged. If departments are generating any kind of income, even on a break-even or partial recovery basis, these receipts should be deposited in an appropriate parent account (See Overview: Processing University Receipts). In addition to meeting processing guidelines, merchants have two major considerations. First, the tax implications of the business activity, and secondly, the services available to merchants to support their trade.
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Tax Considerations
As a not-for-profit educational institution, Stanford University is exempt from income tax for activities that are substantially related to its educational and research missions. However, if Stanford were to carry out a trade or business activity that is not substantially related to its exempt purposes, generating what is called Unrelated Business Income, it would be subject to tax on the net income generated (See Resources & Job Aids: Unrelated Business Income Tutorial).
Support Services
For units at Stanford that offer products and services for sale, there are a variety of support services available.
- eCommerce
- Banking Services
Stanford eCommerce is a suite of services managed by the Controller’s Office that enables Stanford’s schools, centers and departments to establish themselves as merchants to market and sell products and services on the web and accept credit card payments (See Overview: Stanford eCommerce Services).
A variety of banking services are available to Stanford Schools and Departments (See Overview: Banking Services).