[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1551 Introduced in House (IH)]
103d CONGRESS
1st Session
H. R. 1551
To amend the Internal Revenue Code of 1986 to provide an exclusion from
unrelated business taxable income for certain sponsorship payments.
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IN THE HOUSE OF REPRESENTATIVES
March 31, 1993
Mr. Brewster (for himself and Mr. Camp) introduced the following bill;
which was referred to the Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to provide an exclusion from
unrelated business taxable income for certain sponsorship payments.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. EXCLUSION FROM UNRELATED BUSINESS TAXABLE INCOME FOR CERTAIN
SPONSORSHIP PAYMENTS.
(a) In General.--Section 513 of the Internal Revenue Code of 1986
(relating to unrelated business taxable income) is amended by adding at
the end thereof the following new subsection:
``(i) Treatment of Certain Sponsorship Payments.--
``(1) In general.--The term `unrelated trade or business'
does not include the activity of soliciting and receiving
qualified sponsorship payments with respect to any qualified
public event.
``(2) Qualified sponsorship payments.--For purposes of this
subsection, the term `qualified sponsorship payment' means any
payment by any person engaged in a trade or business with
respect to which there is no arrangement or expectation that
such person will receive any substantial return benefit other
than--
``(A) the use of the name or logo of such person's
trade or business in connection with any qualified
public event under arrangements (including advertising)
in connection with such event which acknowledge such
person's sponsorship or promote such person's products
or services, or
``(B) the furnishing of facilities, services, or
other privileges in connection with such event to
individuals designated by such person.
``(3) Qualified public event.--
``(A) In general.--For purposes of this subsection,
the term `qualified public event' means any event
conducted by an organization described in paragraph
(3), (4), (5), or (6) of section 501(c) or by an
organization described in section 511(a)(2)(B) if such
event is--
``(i) a public event the conduct of which
is substantially related (aside from the need
of the organization for income or funds or the
use it makes of the profits derived) to the
exempt purposes of the organization conducting
such event, or
``(ii) any public event not described in
clause (i) but only if such event is the only
event of that type conducted by such
organization during a calendar year and such
event does not exceed 30 consecutive days.
An event shall be treated as a qualified public event
with respect to all organizations referred to in the
preceding sentence which receive sponsorship payments
with respect to such event if such event is a qualified
public event with respect to 1 of such organizations;
except that a payment shall be treated as not being
from an unrelated trade or business by reason of this
sentence only to the extent that such payment is used
to meet the expenses of such event or for the benefit
of the organization with respect to which such event is
a qualified public event (determined without regard to
this sentence).
``(B) Exempt purpose.--For purposes of subparagraph
(A), the term `exempt purpose' means any purpose or
function constituting the basis for the organization's
exemption under section 501 (or, in the case of an
organization described in section 511(a)(2)(B), the
exercise or performance of any purpose or function
described in section 501(c)(3)).
``(4) Regulations.--The Secretary shall prescribe such
regulations as may be necessary to prevent the avoidance of the
purposes of this subsection through the use of entities under
common control.''
(b) Effective Date.--The amendment made by subsection (a) shall
apply to events conducted after December 31, 1992.
SEC. 2. TREATMENT OF CERTAIN AMOUNTS RECEIVED BY OLYMPIC ORGANIZATIONS.
In the case of a qualified amateur sports organization described in
section 501(j)(2) of the Internal Revenue Code of 1986 or an
organization which would be so described but for the cultural events it
organizes in connection with national or international amateur sports
competitions--
(1) for purposes of section 512(b) of such Code, the term
``royalty'' includes any income received (directly or
indirectly) by such organization if a substantial part of the
consideration for such income is the right to use trademarks,
designations, or similar properties indicating a connection
with the Olympic Games to be conducted in 1996 or related
events or the participation of the United States Olympic Team
at such Games or events, and
(2) nothing in section 514 or 512(b) of such Code shall be
construed as treating any amount treated as royalty under
paragraph (1) as an item of income from an unrelated trade or
business.
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