what happens if ubti tax isn t paid 
an exempt organization may be subject to interest and penalty charges if it fails to pay a tax when the tax is due it underpays its tax liability doesn t file a return or files a late return 9the bottom lineunrelated business taxable income ubti is income earned by a tax exempt entity that isn t related to the tax exempt purpose of the entity an income earning activity is considered to be unrelated if it involves a trade or business is carried on regularly and is not substantially related to helping the organization carry out its mission with some exceptions organizations will owe federal and state corporate or trust taxes on annual gross unrelated business income over 500 