Proposed taxes and bans on college business activities grow out of criticism from the owners of small businesses that colleges and other non-profit organizations abuse their tax-exempt status to compete with tax-paying companies by selling certain items. (MLW)

Some higher education groups are concerned that the strategies adopted by other groups to counter industry's charges of college abuse of tax-exempt status will further alienate Congress and stimulate new restrictions on the business activities of nonprofit groups. (MSE)

Revisions of federal tax law governing the business operations of nonprofit institutions would no longer define a business activity as "related" to the organization's primary mission, and thus tax exempt, solely because it is operated for the convenience of members or students. (MSE)

A new lobbying strategy by six universities, designed to show Congress that higher education may be willing to give up some tax advantages under current law, is also criticized as a tactical error when Congress is just beginning to consider changes in the tax law affecting nonprofit groups. (MSE)

Small-business leaders have persuaded many lawmakers that nonprofit organizations--particularly colleges and universities--have used their tax-exempt status and government support to gain an unfair advantage over privately owned businesses. Computer-store owners, private chemical-laboratory owners, and travel agents say colleges should not receive…