Description
The Girl Scouts of the USA (“Girl Scouts”) is a tax-exempt organization under § 501(c)(3), which has a mission designed to “build[] girls of courage, confidence, and character, who make the world a better place.” The organization describes its sale of Girl Scout Cookies as the largest girl-led business enterprise in the world, which NBC News describes here: http://www.nbcnews.com/id/42270952/ns/business-small_business/t/how-girl-scouts-built-their-million-cookie-empire/#.WRdvNFKZOV4. The Girl Scouts notes that “Girl Scout Cookies not only help Girl Scouts earn money for fun, educational activities and community projects, but also play a huge role in transforming girls into G.I.R.L.s (Go-getters, Innovators, Risk-takers, Leaders)™ as they learn essential life skills that will stay with them forever.” Explain, in no more than 2 typed pages, your responses to the following questions: Is the income that the Girl Scouts earns from cookie sales exempt from tax? Does it matter that the Girl Scouts now makes some online cookie sales (see http://www.girlscouts.org/en/cookies/all-about-cookies/digital-cookie.html)? Does your answer change knowing that the Girl Scouts collects royalties when for-profit entities enter into licensing arrangements to use Girl Scout Cookies (the Girl Scouts website notes: “Girl Scouts of the USA has contractual relationships with select companies to include Girl Scout Cookies in their products and to use the Girl Scout name and trademarks in conjunction with those products. These rights are granted under national licensing agreements, and Girl Scouts of the USA is the only entity that may enter into such an agreement.”) (see, for example, https://news.dunkindonuts.com/news/dunkin-brings-back-beloved-girl-scout-cookieTM-inspired-coffee-flavors-coconut-caramel-and-thin-mintsR)? If the cookie sales are exempt from tax (or the income of other tax-exempt organizations is exempt from tax) because it is related to an exempt purpose, then should we have the same concerns about unfair competition as we do under the UBIT rules (i.e., if a for-profit entity sells cookies, then–from a competitive standpoint–does it really matter whether selling cookies is related or unrelated to the purpose of the Girl Scouts)?
