United States v. American College of Physicians (1985)
- Docket
- 84-1737
- Decided
- 1985-01-01
Summary
Question: Were advertisements for medical products in the American College of Physicians' medical journal "substantially related" to the organization's tax-exempt purpose of maintaining high standards in medicine, and therefore tax-exempt? Conclusion: No. In a unanimous decision authored by Justice Thurgood Marshall, the Supreme Court held that the advertisements in this particular case were not "substantially related" to the medical journal's educational purposes. The Court found that the conduct of the journal, rather than the content of the advertisements, was the relevant factor. Quoting the Claims Court, Justice Marshall wrote, "The evidence is clear that plaintiff did not use the advertising to provide its readers a comprehensive or systematic presentation of any aspect of the goods or services publicized. Those companies willing to pay for advertising space got it; others did not." The Court rejected both the government's contention that all advertising revenue should be taxed and the journal's contention that any informative advertising revenue should be exempt, relying instead on a case-by-case examination.