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Marketing and the law

Marketing and the law Ann Morales Olazdbal, Anita Cava, and Ren6 Sacasas, Editors University of Miami exercise or performance by such organizations of its chaff- Level Playing Field: Income From table, educational, or other purposes. To avoid having Subscriptions and Advertising income classified as UBTI, the activity from which the Arkansas State Police Association Inc. v. Commis- income is derived must be substantially related to the sioner, 282 F.3d 556 (8th Cir. 2002) exempt purposes of the organization and must not be "reg- ularly carried on." Magazine publishers--like other rational business However, the UBTI rules do contain exceptions. Under owners--are imbued with the profit motive. Accordingly, Code w 512(b)(2), all royalties earned by exempt organiza- they set prices for subscriptions and advertising based on a tions are excluded from the calculation of UBTI. As a set of financial criteria: return on investment, payback result, many nonprofit entities have structured their pub- period, revenue potential, value enhancement. But what lishing arrangements so that the income paid to the tax- happens when a publication is owned and published by a exempt organization based on ad space sold by the pub- not-for-profit organization? In theory, the National Geo- lisher is classified as royalties. Under such an http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of the Academy of Marketing Science Springer Journals

Marketing and the law

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Publisher
Springer Journals
Copyright
Copyright © Academy of Marketing Science 2003
Subject
Economics / Management Science; Business/Management Science, general; Marketing; Social Sciences, general
ISSN
0092-0703
eISSN
1552-7824
DOI
10.1177/0092070303031002013
Publisher site
See Article on Publisher Site

Abstract

Ann Morales Olazdbal, Anita Cava, and Ren6 Sacasas, Editors University of Miami exercise or performance by such organizations of its chaff- Level Playing Field: Income From table, educational, or other purposes. To avoid having Subscriptions and Advertising income classified as UBTI, the activity from which the Arkansas State Police Association Inc. v. Commis- income is derived must be substantially related to the sioner, 282 F.3d 556 (8th Cir. 2002) exempt purposes of the organization and must not be "reg- ularly carried on." Magazine publishers--like other rational business However, the UBTI rules do contain exceptions. Under owners--are imbued with the profit motive. Accordingly, Code w 512(b)(2), all royalties earned by exempt organiza- they set prices for subscriptions and advertising based on a tions are excluded from the calculation of UBTI. As a set of financial criteria: return on investment, payback result, many nonprofit entities have structured their pub- period, revenue potential, value enhancement. But what lishing arrangements so that the income paid to the tax- happens when a publication is owned and published by a exempt organization based on ad space sold by the pub- not-for-profit organization? In theory, the National Geo- lisher is classified as royalties. Under such an

Journal

Journal of the Academy of Marketing Science – Springer Journals

Published: Mar 1, 2003

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