UNRELATED TRADE OR BUSINESS INCOME OF TRADE SHOWS, STATE FAIRS, ETC.

SEC. 1305. UNRELATED TRADE OR BUSINESS INCOME OF TRADE SHOWS, STATE FAIRS, ETC. (a) In General.— Section 513 (relating to unrelated trade or business) is amended by adding at the end thereof the following new subsection: “(d) Certain Activities of Trade Shows, State Fairs, Etc.— “(1) General rule.— The term ‘unrelated trade or business’ does not include qualified public entertainment activities of an organization described in paragraph (2)(C), or qualified convention and trade show activities of an organization described in paragraph (3)(C). “(2) Qualified public entertainment activities.— For purposes of this subsection— “(A) Public entertainment activity.— The term ‘public entertainment activity’ means any entertainment or recreational activity of a kind traditionally conducted at fairs or expositions promoting agricultural and educational purposes, including, but not limited to, any activity one of the purposes of which is to attract the public to fairs or expositions or to promote the breeding of animals or the development of products or equipment. “(B) Qualified public entertainment activity.— The term ‘qualified public entertainment activity’ means a public entertainment activity which is conducted by a qualifying organization described in subparagraph (C) in— “(i) conjunction with an international, national, State, regional, or local fair or exposition, “(ii) accordance with the provisions of State law which permit the activity to be operated or conducted solely by such an organization, or by an agency, instrumentality, or political subdivision of such State, or “(iii) accordance with the provisions of State law which permit such an organization to be granted a license to conduct not more than 20 days of such activity on payment, to the State of a lower percentage of the revenue from such licensed activity than the State requires from organizations not described in section 501(c)(3), (4), or (5). “(C) Qualifying organization.— For purposes of this paragraph, the term ‘qualifying organization’ means an organization which is described in section 501(c)(3), (4), or (5) which regularly conducts, as one of its substantial exempt purposes, an agricultural and educational fair or exposition. “(3) Qualified convention and trade snow activities.— “(A) Convention and trade show activity.— The term ‘convention and trade show activity’ means any activity of a kind traditionally conducted at conventions, annual meetings, or trade shows, including, but not limited to, any activity one 90 STAT. 1717of the purposes of which is to attract persons in an industry generally (without regard to membership in the sponsoring organization) as well as members of the public to the show for the purpose, of displaying industry products or to stimulate interest in, and demand for, industry products or services, or to educate persons engaged in the industry in the development of new products and services or new rules and regulations affecting the industry. “(B) Qualified convention and trade show activity.— The term ‘qualified convention and trade show activity’ means a convention and trade show activity carried out by a qualifying organization described in subparagraph (C) in conjunction with an international, national, State, regional, or local convention, annual meeting, or show conducted by an organization described in subparagraph (C) if one of the purposes of such organization in sponsoring the activity is the promotion and stimulation of interest in, and demand for, the products and services of that industry in general, and the show is designed to achieve such purpose through the character of the exhibits and the extent of the industry products displayed. “(C) Qualifying organization.— For purposes of this paragraph, the term ‘qualifying organization’ means an organization described in section 501(c)(5) or (6) which regularly conducts as one of its substantial exempt purposes a show which stimulates interest in, and demand for, the products of a particular industry or segment of such industry. “(4) Such activities not to affect exempt status.— An organization described in section 501(c)(3), (4), or (5) shall not be considered as not entitled to the exemption allowed under section 501(a) solely because of qualified public entertainment activities conducted by it.” (b) Effective Dates.— The amendments made by subsection (a) apply to qualified public entertainment activities in taxable years beginning after December 31, 1962, and to qualified convention and trade show activities in taxable years beginning after the date of enactment of this Act.