Hi all,
I've recently started soliciting "advertisers/sponsors" for our bi-monthly PTO newsletter. I didn't know this until today, but, there IS A BIG DIFFERENCE between "advertising" and "sponsorship".
Apparently, according to IRS.GOV your PTO can be subjected to UBIT (Unrelated Business Income Tax) if you use "advertisers" versus "sponsors", both of which are paying you money for their name to appear in your publication.
The difference, I discovered is in that "advertisers" are SELLING something and the ad would be qualitative or contain inducements to attract a potential buyer to that company. A "sponsorship" (contribution) ad would only contain the company's vital information such as logo, name, address, phone, etc. Thereby not SELLING anything, but only displaying their company information for consumers to consider.
Please refer to www.irs.gov/pub/irs-pdf/p598.pdf if you have any questions about this UBIT taxes and whether or not they may pertain to your PTO.
As the old saying goes, you learn something new every day! ...and I sure do!!! [img]smile.gif[/img]