TOOK A TAX TRICK

Gisborne Herald, Volume LXXV, Issue 22572, 27 February 1948, Page 2

TOOK A TAX TRICK

U.S. UNIVERSITIES BUSINESS NEW YORK. Jan. 20. Wealthy American universities are taking advantage of their tax-free status as educational institutions to make millions of dollars a year from business. Witness at a Congressional committee inquiry named several universities, including Yale, Washington and Cornell, which, they said, had gone into business on a large scale. These were cited as university activities:— • A piston factory at St. Louis. A university employs all the same executives. • A Philadelphia department store. A university bought it, leased it back to the former owners for £90,000 a year. ... • A leather company with £10,000,000 assets. Lose Both Ways • A retail chain store building. Schenectady University bought the property, valued at £5,000,000, then leased it to the store. The Government has a two-way loss: the store claims the rent as a tax deduction; the university gets the rent tax-free. • A railway freight station and 50 buildings at St. Louis, bringing in £17,000 tax-free to Washington University. , . , • A big spaghetti factory, which paid £70,000 a year tax; now earns a tax-free £200,000 a year for a New York law school.