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specifically excluding the income from mailing list transactions
between charities, Congress has agreed with the holding of the
Court of Claims in DAV I that the mailer's list rental payment in
a mailing list transaction is not a royalty that is excludable
from UBTI under section 512(b)(2).
We do not agree. On the day of the adoption of the
conference report accompanying the bill which included section
513(h), Representative Daniel Rostenkowski (D-Ill.), Chairman of
the Ways and Means Committee, commented:
I also have discussed with Congressman Duncan [(R-
Tenn.) Ranking Republican Member of the Ways and Means
Committee] the issue of whether the provision of the
bill which excludes certain income from unrelated trade
or business income creates any inference under present
law. We have reached a common understanding regarding
the following specific issue:
The question relates to section 1601 of the bill which
excludes from unrelated trade or business income revenues
from the use of a tax-exempt organization's mailing list by
another such organization. Section 1601 of the bill, which
specifically exempts certain such revenues from the tax on
unrelated business income in the future, carries no
inference whatever that mailing list revenues beyond its
scope or prior to its effective date should be considered
taxable to an exempt organization. [132 Cong. Rec. 26208
(Sept. 25, 1986).]
Additionally, the General Explanation provided by the Staff of
the Joint Committee on Taxation explains: "No inference is
intended as to whether or not revenues from mailing list
activities other than those described in the provision, or from
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