Are sponsorship and advertising fees subject to unrelated business income tax?
(1) From Laurance Allen Speaking as a practitioner and not a tax lawyer, I’d say that in my experience the answer is Yes. When I served as publisher of Harvard Business Review, part of a large 501(c), the subscription income was not taxable but all advertising revenue was taxed as unrelated business income. I believe the same holds true at National Geographic and the Smithsonian’s magazine. [Posted 6/14/05] (2) From Marci Waialeale Sarsona In our case, a local car dealership has placed their logo on the doors of our leased vans. Each month the dealership cleans/washes our vans and gives us $100.00 per van (a total of $600.00 per month). We are required to pay UBIT. [Posted 6/22/05] (3) From Allen Bromberger, Esq. The short answer is “Yes.” Advertising income is subject to UBIT if the publication activity is “regularly carried on,” even if the publication (and even the sales activity) is directly related to the organization’s mission. This rule was originally adopted by the IRS in 1993,
