&gt; From the second link you posted, why couldn&#x27;t selling a license be considered &quot;selling donated merchandise&quot; (the code is the merchandise) and therefore exempt from being taxed as unrelated business income?<p>FOSS expenses are generally related to giving the developers money to do X or for infrastructure. [e.g. Pay for bug bounties, pay for security audits, FreeBSD&#x27;s utility bills for electricity]<p>At which point, it isn&#x27;t &quot;donated merchandise&quot; as you are paying for some of the contributions and&#x2F;or using sales to fund your infrastructure. That is a slippery slope to audits which is the sort of mess that Patio11 is trying to avoid on his end by exporting it to the FOSS end.<p>Except, this time, instead of line items its integral to the entire code for the project in some cases which risks calling the entire project into question. [e.g. security audits, paying for infrastructure]<p>&gt; It seems like there could be a great opportunity for some kind of platform company that handled all this hassle for FOSS projects that want to offer paid licenses.<p>This isn&#x27;t a SaaS platform opportunity. This is a &quot;You have to pay a CPA and a Non-Profit Tax Attorney&quot; situation to make sure you are on the right side of the law with the entire process from end to end.<p><a href="https:&#x2F;&#x2F;blogs.gnome.org&#x2F;jnelson&#x2F;2014&#x2F;06&#x2F;30&#x2F;the-new-501c3-and-the-future-of-free-software-in-the-united-states&#x2F;" rel="nofollow">https:&#x2F;&#x2F;blogs.gnome.org&#x2F;jnelson&#x2F;2014&#x2F;06&#x2F;30&#x2F;the-new-501c3-and...</a><p>&gt; The requests for clarification contained mostly non-surprising questions.  For example, “Describe whether your organization provides any goods or services for a fee.”  (We don’t.)  Some were odd: “Will any of your directors or employees reside at your facility [i.e. our office]?”  (Ah…no.)<p>&gt; You have a substantial nonexempt purpose because you develop software published under open source compatible licenses that authorize use by any person for any purpose, including nonexempt purposes such as commercial, recreational, or personal purposes, including campaign intervention and lobbying.<p>These are the sort of questions you get asked as part of the 501(c)3 process and this would qualify as &quot;providing any goods or services for a fee&quot; almost certainly.<p>Really, in order to sell licenses like Patio11 would like, you need to be a For Profit entity. You have no chance of going any other direction.