The paper analyzes the reporting practices of Unrelated Business Taxable Income (UBTI) in colleges and universities, and examines evidence of cost shifting between related tax-exempt sources of income and unrelated taxable income to minimize or eliminate tax liability. Increasing commercial-type activities and programs in colleges and universities (among other nonprofit tax-exempt organizations) is generating a growing amount of income unrelated to their core mission and, therefore, is taxable based on the tax code. To minimize tax liability on their growing unrelated income, colleges and universities are motivated to shift expenses from the regular tax-exempt operations and assign them as a tax deductible directly expense related to the unrelated income. Using a sample of colleges and universities during years 2013-2015, I report a significant evidence of cost shifting to minimize tax liability in colleges and universities.