The IRS has recently issued opinions that clarify its position on
museum stores.  The location of the shop is not an issue.  It doesn't
matter *where* one sells, but rather *what* one sells.  So, for example,
an off-site store may be exempt from UBIT, just as catalog stores are,
and on the same principle.  But if stores sell merchandise unrelated to
mission, then sales will be subject to UBIT, regardless of location.

A case could be made that, from the IRS ppoint of view, the closer the
store is to the exhibit, the less likely it is that sales will be subject
to UBIT.

Lending support to this proposition, the IRS ruled that a museum
restaurant that had doors opening to the outside, as well as to the
museum itself, had to pay UBIT on those sales deriving from people coming
from "off the sidewalk," while sales to people coming from the museum
remained exempt.

Just to be clear, I'm not advocating that sales be made out of exhibits.

Andy Finch
AAM Government Affairs
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