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35 Ariz. L. Rev. 841 (1993)
Why Is Harvard Tax-Exempt And Other Mysteries of Tax Exemption for Private Educational Institutions

handle is hein.journals/arz35 and id is 857 raw text is: Articles WHY Is HARVARD TAX-EXEMPT? (AND OTHER MYSTERIES OF TAX EXEMPTION FOR PRIVATE EDUCATIONAL INSTITUTIONS) John D. Colombo* TABLE OF CONTENTS I. INTRODUCTION ................................................................................... 842 I1. BACKGROUND: THE HISTORY OF TAX EXEMPTION FOR PRIVATE EDUCATIONAL INSTITUTIONS ............................................................... 844 I. CURRENTLEGAL STANDARDS FOR EXEMPTING PRIVAE EDUCATIONAL INSTITUTIONS ............................................................... 845 A. Federal Standards For Exemption ............................................... 845 1. Education as a Charitable Purpose ................................. 845 2. Limitations on the Definition ......................................... 847 a. The Commerciality Doctrine ..................................... 848 b. Private Benefit/Inurement ........................................ 850 c. Education vs. Propaganda ..................................... 851 d. The Public Policy Limitation .................................... 853 B. State Exemption Standards ......................................................... 855 C. Summary ................................................................................. 857 IV. THEORIES OF EXEMPTION AND PRIVATE EDUCATIONAL INSTITUTIONS ..................................................................................... 857 A. The Nature of Exemption: Bittker's Income Measurement Theory .................................................................................... 857 B. The Subsidy Theories ................................................................ 861 1. The Quid-Pro-Quo Theory ........................................... 862 2. The Community Benefit Theory .................................... 864 3. Hansmann's Capital Subsidy Theory ............................... 868 4. Atkinson's Altruism Theory .......................................... 871 5. The Donative Theory ................................................... 873 a. The Economic Basis for the Donative Theory ............. 874 * Associate Professor of Law, University of Illinois College of Law, A.B. 1978, J.D. 1981, University of Illinois. The author would like to thank his wife, Tina Colombo, for her editorial assistance; Professors Rob Atkinson, Steve Bainbridge, Bill Davey, Mark Hall, Andy Leipold, Debby Merritt, Jim Pfander and Steve Ross for their substantive comments on earlier drafts of this Article; Ms. Colleen Glaser for her research assistance; and Greg, for letting his father-use the home computer, mostly willingly, during the reconstruction of the College of Law.

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