By Andrew Zajac/Bloomberg Businessweek
A portion of National Education Association members’ dues count as circulation income for the union’s magazine, creating a $1.1 million tax bill for the group, the U.S. Tax Court ruled.
The court said in the ruling today that because NEA members had a “right to receive” the magazine, a share of member dues counted as circulation income.
That dues income wiped out a loss from circulation activity that was unavailable to offset taxable revenue from advertising in the magazine, NEA Today, according to the ruling.
As a result, the NEA owed tax of $319,094 for 2001, $444,554 for 2002 and $342,371 for 2003, according to Internal Revenue Service findings in June 2009 that led the teachers union to take its case to the tax court.