Document Type

Article

Publication Date

2000

Abstract

By now, it is perhaps cliche to quote Sir Walter Scott's familiar refrain' when referring to communications occurring via the World Wide Web (the Web). And yet, that age-old wisdom comes readily to mind when one considers the unrelated business income tax (UBIT) as it relates to charities that, for consideration paid, participate in a profit-seeker's web-based marketing communications. That first lie, to be precise, is that a charity's payment-induced, unlimited public display of a profit-seeker's logo, slogan and product, when unaccompanied by "comparative or qualitative descriptions" or explicit requests to buy, results in no trade or business income for purposes of UBIT. Thus, the Orange Bowl Committee is not selling anything when, upon receipt of value, it renames its football game from "The Orange Bowl," to "The FedEX Orange Bowl," and then incessantly repeats that name in its media, including its official Website. And now, as that lie is unloosed in Cyberspace, it looks as though it will undergo a period of growth at least as intense and exponential as the growth of the Web itself. Indeed, to avoid exposure of the original lie, the law must weave ever more elaborate patterns of necessarily myopic rules having no relationship to the reality or virtual reality of marketing communications.

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Tax Law Commons

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