“Whether income derived by a tax-exempt medical association from the sale of commercial advertising space in its monthly journal is ‘unrelated business income’ subject to tax under Sections 511 through 513 of the Internal Revenue Code.”
“Whether respondent’s advertising income is taxable . . . depends upon . . . whether it is substantially related to respondent’s tax-exempt purposes. . . . It remains to be determined whether, in this case, the business of selling advertising space is ‘substantially related’—or, in the words of the regulation, ‘contributes importantly’—to the purposes for which respondent enjoys an exemption from federal taxation. . . . Considering [the trial court’s findings of fact] in light of the applicable legal standard, we are bound to conclude that the advertising in Annals does not contribute importantly to the journal’s educational purposes.”
