Eighth Circuit Affirms Mayo Clinic’s “Educational Organization” Status and UBTI Refund

On July 25, 2025, the U.S. Court of Appeals for the Eighth Circuit affirmed the District Court decision holding that the Mayo Clinic is entitled to an $11.5 million refund of certain unrelated business income taxes imposed on it due to it being an “educational organization” under section 170(b)(1)(A)(ii). [1]

We previously discussed the District Court’s ruling here. As a refresher, section 514(c)(9) generally provides an exemption from tax on unrelated business taxable income (“UBTI”) related to certain acquisition indebtedness for “qualified organizations,” including educational organizations described in section 170(b)(1)(A)(ii) (the “UBTI exemption”). [2] In this context, an organization is considered educational if its “primary function” is educational and its noneducational activi