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from UBTI under section 512(b)(2). Our holdings obviate the need
to address respondent's trade or business arguments.
Respondent's Remaining Arguments
No Written Licensing Agreement
Respondent contends that the list rental payments are not
royalties because there is no written licensing agreement between
petitioner and the list manager, CMS, or Triplex. We conclude
that, even though there is no written agreement termed a
"licensing agreement", the terms and conditions of the
transaction between the mailer and petitioner require the mailer
to receive only a one-time right to use the information contained
on petitioner's rental list. Accordingly, we conclude that each
mailing list transaction represents a separate licensing of
petitioner's list by the mailer and that the absence of a written
"licensing agreement" does not prevent the mailer's list rental
payment from being a royalty.
Section 513(h)
Finally, respondent argues that the enactment of section
513(h) precludes a conclusion that the list rental payment is a
royalty. The relevant parts of section 513(h) provide:
SEC. 513(h). Certain Distributions of Low Cost
Articles Without Obligation to Purchase and Exchanges
and Rentals of Member Lists.--
(1) In general.--In case of an
organization which is described in section
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