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TITLE 26-INTERNAL REVENUE CODE tivity does not lose identity as a trade or busi- ness merely because it is carried on within a larger aggregate of similar activities or within a larger complex of other endeavors which may, or may not, be related to the exempt purposes of the organization. Where an activity carried on for profit constitutes an unrelated trade or business, no part of such trade or business shall be excluded from such classification merely be- cause it does not result in profit. (d) Certain activities of trade shows, state fairs, etc. (1) General rule The term "unrelated trade or business" does not include qualified public entertain- ment activities of an organization described in paragraph (2)(C), or qualified convention and trade show activities of an organization de- scribed 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 pur- poses of which is to attract the public to fairs or expositions or to promote the breed. ing of animals or the development of prod- ucts or equipment. (B) Qualified public entertainment activity The term "qualified public entertainment activity" means a public entertainment ac- tivity which is conducted by a qualifying or- ganization 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, instrumen- tality, or political subdivision of such State, or (iii) accordance with the provisions of State law which permit such an organiza- tion to be granted a license to conduct not more than 20 days of such activity on pay- ment to the State of a lower percentage of the revenue from such licensed activity than the State requires from organiza- tions not described in section 501(c)(3), (4), or (5). (C) Qualifying organization For purposes of this paragraph, the term "qualifying organization" means an organi- zation 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 exposi- tion. (3) Qualified convention and trade show activities (A) Convention and trade show activities The term "convention and trade show ac- tivity" means any activity of a kind tradi- tionally conducted at conventions, annual meetings, or trade shows, including, but not limited to, any activity one of 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, in- dustry products or services, or to educate persons engaged in the industry in the de- vclopment of new products and services or new rules and regulations affecting the in- dustry. (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 qualify- .ing organization described in subparagraph (C) in conjunction with an international, national, State, regional, or local conven- tion, annual meeting, or show conducted by an organization described in subparagraph (C) if one of the purposes of such organiza- tion in sponsoring the activity is the promo- tion and stimulation of interest in, and demand for, the products and services of that industry in general, and the show is de- signed 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 organi- zation described in section 501(c)(5) or (6) which regularly conducts as one of its sub- stantial exempt purposes a show which stimulates interest in, and demand for, the products of a particular industry or seg- ment 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 sec- tion 501(a) solely because of qualified public entertainment activities conducted by It. (e) Certain hospiWi services In the case of a hospital described in section 170(b)(1)(A)(iii), the term "unrelated trade or business" does not include the furnishing of one or more of the services described in section 501(e)(1)(A) to one or more hospitals described in section 170(b)(1)(A)(iii) if- (1) such services are furnished solely to such hospitals which have facilities to serve not more than 100 inpatients; (2) such services, if performed on its own behalf by the recipient hospital, would consti- tute activities in exercising or performing the purpose or function constituting the basis for its exemption; and (3) such services are provided at a fee or cost which does not exceed the actual cost of providing such services, such cost including straight line depreciation and a reasonable amount for return on capital goods used to provide such services. (Aug. 16, 1954, ch. 736, 68A Stat. 172; July 14, 1960, Pub. L. 86-667, § 4, 74 Stat. 536; Dec. 30, 1969, Pub. L. 91-172, title I, § 121(b)(4), (c), 83 Stat. 541, 542; Oct. 4, 1976, Pub. L. 94-455, title XIII, §§ 1305(a), 1311(a), 90 Stat. 1716, 1729.) Page 395 § 513