A recent post suggested that museum shops cannot sell merchandise that
is unrelated to their institutions' collections.  In fact, museum shops
in the U.S. may sell unrelated merchandise, but such sales are subject
to the Unrelated Business Income Tax (UBIT).  If it conducts an audit,
the Internal Revenue Service will determine the "relatedness" of each
item and assess tax accordingly.  There are exceptions to the rule,
including (for example) certain items that are sold for the visitors'
convenience.  In a recent case, IRS ruled that Colonial Williamsburg
could sell raincoats without being taxed, because visitors might not
otherwise be able to view the collections.  But they weren't allowed the
same privilege for toothpaste and pain-relievers.

The issue of whether any given item is also carried by for-profit shops
is irrelevant, at least to the IRS.

Andy Finch
AAM Government Affairs
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