Renting Mailing Lists - Is it Right For Your Business?

Mailing lists are one of the best sources of gaining targeted leads, as well as increasing sales. When you use the mailing lists of other businesses or organizations, they can be very valuable assets to your own company. Because many mailing lists have been accumulated over time and have quite a history behind them, it can sometimes be difficult to find new ones to add to your own list. This is why it is so important to consider renting your mailing list from a list broker. These services allow you to increase the size of your mailing list without having to spend any of your company's funds in doing so.

List brokers collect names, addresses, and other information from various businesses and organizations, then they compile and create an appropriate mailing list for you. They then place that list with your name on it for you. In return for this valuable service, you collect a monthly fee. While this is not a "direct mail" service like traditional bulk mailings, it is still a valuable method to add names to your mailing lists, as well as receiving valuable marketing assistance.

You will never see this type of mailing list offered to the general public again. There are many reasons for this, but mostly it has to do with the way that companies classify their commercial email recipients. In the past, all email correspondence between a corporation and its customers was considered commercial email correspondence. This means that anyone opening that email had to include the sender's contact information, as well as their company address. This created problems with businesses who had mailing lists that were large, as they had to individually request the inclusion of all of the addresses listed with their customer.

The IRS created the UBIT, or unrelated business taxable income, which required the addition of the sender's mailing list to every single receipt. The IRS also created a UBIT for corporations, which required them to include that address in any income-gain statement that they prepared. This resulted in a very large problem for many large corporations and their owners. They could not deduct their entire profit on the basis of the UBIT to their gross revenue, even if that revenue came directly from their mailing list.

To resolve this issue, the IRS devised another tax deduction related to the mailing list, called the UBIT-related expenses. This tax deduction was designed to allow corporations to take full advantage of the mailing list, while still being able to deduct the costs associated with maintaining the list. Essentially, it requires the business to show the appropriate return form, which should have the appropriate UBIT applied to it. In order to qualify for this tax deduction, a corporation must itemize its income-expense itemized report. This report must contain the appropriate UBIT for that year, along with the date that the itemized deduction was made. The IRS has placed limits on the amount of money that may be deducted and for what purposes, but the important thing to remember is that a UBIT-related expense cannot exceed 100% of the corporate income for that year.

If you are a corporation or a limited liability company, you can take advantage of this asset and use it as a tax deduction. You will want to consult with a certified public accountant or CPA to help you navigate the complex tax codes related to using a UBIT to deduct your mailing list costs. In most cases, the mailing list rental is treated as an expense to be deductible in the year of purchase, but it can be considered a qualified expenses, if the rental of the list was intended for your business's use. A UBIT-related expense cannot be deducted if the mailing list was purchased solely for your own use, if you are using it only for your business, or if you will not use it for your business. Additionally, you must be able to prove that you incurred the expenses.

If you are a sole proprietorship or a partnership, the first owner usually establishes its ownership interest in its UBIT by purchasing a lien on its shares in the business. This means that the proprietor is responsible for paying UBIT on its shares, unless the owner is able to prove otherwise. This means that the owner must calculate its UBIT at the time of purchase and must document its basis for such calculation. The method used to calculate the UBIT is generally under UBIT per share, less any related party rebates or fees. In order to properly document the nature and amount of your related party's rebate or fee claims on the purchase of its mailing lists, you will want to retain the records of the purchase in perpetuity, so you may refer back to them should the need arise.

In conclusion, when you rent mailing lists for your business, you will want to consider both the advantages and disadvantages of doing so. You should make certain that you are fully aware of all of the applicable tax laws relating to using mailing lists. In most instances, you will find that using mailing lists is an excellent way to broaden your business offerings, as well as to increase your exposure to potential customers and clients. But you must be certain that you understand all of the related costs, such as UBIT and related parties' claims.