- 19 - property to obtain a royalty, renders the payment for the use of that right UBTI and not a royalty." Sierra Club, Inc. v. Commissioner, 86 F.3d at 1536. Accordingly, in the instant case, we carefully scrutinize the activities of each of the parties compensated in the list rental transaction to ascertain whether they are undertaken to exploit or protect petitioner's list. Hereinafter, we refer to activities which are undertaken to exploit or protect the list as royalty-related activities. The List Manager In a list rental transaction, the list manager's activities include: (1) Promoting list rental transactions involving petitioner's rental list via advertising, distribution of data cards, solicitations, and personal sales calls directed at list brokers and potential customers; (2) forwarding the list rental order to CMS for approval; (3) arranging with Triplex to fill the order; (4) billing the mailer or the mailer's list broker; (5) paying Triplex the amounts it is owed; and (6) remitting payment to CMS. In the context of the list rental transaction, a list owner has certain intangible information regarding the individuals and entities whose names and addresses appear on its list. Specifically, the list owner knows that such individuals and entities are responsive to direct mail and willing to support certain tax-exempt organizations. To exploit that knowledge, the list owner must first let others know that the list is available.Page: Previous 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Next
Last modified: May 25, 2011