Do You Want Innovation and Jobs? Repeal § 511

32 Pages Posted: 29 Aug 2018

See all articles by Steve Black

Steve Black

Texas Tech University School of Law

Date Written: August 20, 2018


Since 1950, Congress has limited the scope of the activities in which a nonprofit entity could participate, in part due to a controversy over a pasta company donated to the NYU School of Law by a couple of wealthy alumni. The pasta profits helped the school refurbish and expand, but competing noodle manufacturers complained that the law school was not paying taxes on what was a commercial venture. Today, as we face high unemployment and a struggling economy, innovation and job creation are matters of national and international concern. Our universities harbor large untapped reserves of intellectual capital - commercial projects that, in large measure, have been relatively ignored because of the controversy that arose in the 1950s. Is it time to repeal or grant a holiday from the tax laws that restrict nonprofits from entering the marketplace?

Keywords: Intellectual Property, Unrelated Business Income Tax, Exempt Organizations, Nonprofits, Innovation, Universities, Income Tax

JEL Classification: K19, H2, H20, H25, H21, H71, K34, O34, D23, K11

Suggested Citation

Black, Steve, Do You Want Innovation and Jobs? Repeal § 511 (August 20, 2018). Washburn Law Journal, Vol. 57, No. 3, 2018, Available at SSRN:

Steve Black (Contact Author)

Texas Tech University School of Law ( email )

3311 18th Street
Lubbock, TX 79409
United States
8068341604 (Phone)

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