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ending June 30, 1989, $20,059 for the tax year ending June 30,
1990, and $26,143 for the tax year ending June 30, 1991.
The issue for decision is whether petitioner's income from
an affinity credit card program is a royalty excluded by section
512(b)(2) from the tax on unrelated business taxable income. We
hold that it is.
Section references are to the Internal Revenue Code in
effect for the years in issue. Rule references are to the Tax
Court Rules of Practice and Procedure.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
A. Petitioner and Mississippi State University
1. Petitioner
The State of Mississippi operates Mississippi State
University (MSU) in the town of Mississippi State, Mississippi.
Petitioner's principal office was in Mississippi State,
Mississippi, when it filed the petition in this case. Petitioner
is MSU's alumni organization.
Petitioner informs alumni about MSU, solicits gifts from
alumni and supporters, and organizes alumni chapters. Petitioner
uses direct mail and telemarketing to raise funds for MSU.
Petitioner requests contributions from MSU alumni and sends them
Mississippi State Alumnus magazine (Alumnus) and information
about homecoming, class reunions, and chapter events. Petitioner
has about 100 chapters.
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