Mayo Clinic Keeps $11.5 Million Tax Refund on Exemption Appeal

Mayo Clinic is entitled to an $11.5 million refund because the nonprofit qualifies as an educational institution for tax purposes, the Eighth Circuit said Friday.

The US appealed a Minnesota federal court’s ruling that Mayo is owed a refund because the academic medical center’s status as an educational institution exempts its debt-financed property income from unrelated business income tax. Without that status, nonprofits like Mayo can still be liable for UBIT on income not related to their tax-exempt purpose.

The US Court of Appeals for the Eighth Circuit affirmed that Mayo qualifies as a UBIT-exempt educational institution, entitling it to ...