Author: Liles, Kenneth H. and Roth, Stephen E.

Publication Year: 1977

Media Type: Report

Summary:

Museums have been breaking attendance records, and they have brought in additional income through gift shop sales and other ancillary activities. This trend has refocused attention on the status of ancillary trade or business activities of museums for federal income tax purposes.

Abstract:

... museums [have] been breaking attendance records, [and] they have brought in additional income through gift shop sales and other ancillary activities. This trend has refocused attention on the status of ancillary trade or business activities of museums for federal income tax purposes.

The tax status of these activities is an important consideration in deciding whether to engage in such activities and if so, to what degree and in what manner. The structure of taxation has not only immediate tax planning ramifications but also broader societal effects. The extent to which financially troubled museums can engage in profit-making activities without endangering their tax-exempt status and the extent to which income from such activities is not taxable may substantially affect the scope of their continued cultural and educational contributions. (p. 638-639).

CONTENTS
1. The tax on unrelated business income.

A. Origin of the tax.
B. Definitions.
C. Calculation of taxable income.

2. Special problems of art museums.

A. Qualification of the organization for exemption.
B. Gift shops.
C. Eating facilities.
D. Other facilities.
E. Other activities.

Conclusion.

Arts & Intersections:

Categories: Financial Management