Foley & Lardner LLP

01 September 2011
Taxation of Exempts

UBIT Royalty Treatment Extended to Income From Insurance Sales

Partner Richard Riley and Associate Jason Kohout said the court’s decision in Bellco Credit Union v. U.S. confirmed that royalties excluded from unrelated business income taxes (UBIT) are not limited to any particular type of business arrangement or product. The authors added that tax-exempt royalties represent substantial revenue streams for qualifying organizations, but pointed out that royalties remain a controversial aspect of UBIT that may result in additional litigation.