Tax Analysts provides news, analysis, and commentary on tax-related topics, including the latest developments affecting treatment of royalties. 

The term royalties can mean a number of different things – royalties received for copyrights or patents are different from royalties received as an artist or writer, which are different from royalties received for natural resources such as oil, gas, timber, or minerals, and these different types of royalties must be reported on different forms – but they are specifically listed in section 61(a)(6) of the Internal Revenue Code and [reg. section 1.61-8(a) as an item of income that must be included in gross income.

Special rules for royalty taxes and federal treatment of royalties are present throughout the tax code. Examples are reporting of royalty income, whether as a payor or a recipient (section 6050N), inclusion of royalties in unrelated business taxable income (section 512(b)(2)), and in personal holding company income (section 543(a)).

Tax Notes Today State has covered royalty tax issues in administrative rulings, ("Indiana DOR Determines Apportionment of Royalty Income Paid to Delaware Business"), court cases ("Maryland Tax Court's ConAgra Decision: The Fallout From Gore"), and commentary ("Pennsylvania's New Market Sourcing: Narrower Than You May Think").

Taxation of royalties is also a standard article in income tax treaties. Commentary on the taxation of royalties (Article 12) in the OECD’s Model Tax Convention on Income and on Capital addresses the OECD’s model language, reservations that countries have regarding the model, and commentary regarding countries that do not adhere to the interpretation of the model language.

Tax Analysts consistently and promptly publishes all relevant developments regarding royalty income tax treatment.