Princeton University’s Office of Technology Licensing has established the position of executive in residence to help the university commercialize its research, even in the midst of a lawsuit surrounding the tax status of its tech transfer activities.
Filed in 2011 by local plaintiffs, the suit claims Princeton’s rising revenues from commercialized research warrants an increase in the university’s tax duties, which currently don’t apply to most of university property. However, Princeton is still the largest tax contributor in town, spending about $10 million a year on taxes for nonexempt properties and voluntarily paying taxes on some graduate student housing.
Nevertheless, some community members see the new position of executive residence as indicative of Princeton’s corporate priorities. “They’re being sued in a nationally renowned lawsuit over abusing tax-exempt privileges. In the midst of that lawsuit, they move full speed ahead to hire someone whose job it is to increase commercial license,” says Bruce Afran, the plaintiff’s representative and a Princeton-based lawyer. “The more the university institutionalizes its commercial research fund, the less it becomes an academic organization,” Afran adds.
University officials state the new position is not connected to the lawsuit, while Afran says it will be up to Judge Vito Bianco of the Tax Court of New Jersey to decide whether the role is significant to the lawsuit.
Princeton’s income from commercialized research stood at $3 million in 2004, then $63 million by 2009. Last year it reached $136 million.
“From a federal tax standpoint, the issue is whether the income stream qualifies for exclusion,” says Caplin & Drysdale tax lawyer Marcus Owens, implying that court will not focus much on the new position. He adds that if the court rules that Princeton’s operations are not fully appropriate for tax exemption, the university would most likely relocate its tech transfer offices off campus as an independent subsidiary.
Source: The Daily Princetonian