NAR Opposition Letter to Full Senate Regarding Logo Royalty Provision of The Tax Cuts and Jobs Act
Issue Date: November 29, 2017
On November 29, 2017 NAR sent a letter to the full Senate. The letter opposes a provision in The Tax Cuts and Jobs Act, which would subject royalty income derived from the licensing of a tax-exempt organization’s name or logo to the Unrelated Business Income Tax. Under the present law, royalty income is treated as passive income, which is generally not taxed. Indeed, royalties closely resemble other types of passive income for tax-exempt organizations, including rent, interest, and dividends. Where there is little or no service provided by the tax-exempt organization in return for the royalty payments, NAR sees little or no distinction between royalties and these other types of income, and certainly nothing to warrant a change in the tax treatment of these payments.