

Ask HN: Is patio11 right about commercial licenses for OSS? - sarciszewski

Relevant section:<p>http:&#x2F;&#x2F;www.kalzumeus.com&#x2F;2015&#x2F;01&#x2F;28&#x2F;design-and-implementation-of-csvexcel-upload-for-saas&#x2F;#oss<p>Specifically: &quot;My company is literally not allowed by the tax code to donate money, but it can buy any software it feels like&quot;<p>This might be true for &#x27;patio11, but is this the case for many companies (e.g. ones in the United States)? Even where it&#x27;s not true, is there some other factor that would encourage businesses to purchase a license before donating to an OSS project?<p>I&#x27;d like to get other HNer&#x27;s perspectives on these points.
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davismwfl
I will say that in larger organizations there are many times a number of road
blocks to "donate" money to any cause, including an open source project. This
is because there is a different connotation to the act when a company donates
time or money to something, rather then when they purchase a commercial
license. Many times a donation is considered an endorsement, when in fact that
isn't necessarily the case when "donating" to a OSS project. It is more so,
hey we value what you did and are getting value from it so here is some money
to show appreciation etc. Sadly though, in the US with the litigious society
we live in, companies fear "donating" funds to anything where they would not
endorse the people or company behind whatever they are donating to. But the
company would feel fine purchasing a commercial license as at face value it is
a transaction rather than an endorsement.

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sarciszewski
This makes sense too. See also: Brendan Eich.

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ksherlock
Not an accountant, but it depends on how the company is setup.

You as an individual can get a tax deduction for a charitable donation, but
you need to itemize your deductions. If you use the standard deduction (no
mortgage, no huge medical expenses), you might need a $6,000+ donation to get
any tax benefit.

LLCs (and probably other passthrough entities) won't get any special tax
benefit from a charity donation. However software purchases are a business
expense and thus deductible.

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sarciszewski
I do a fair bit of OSS development, and I had considered releasing GPL code
but also selling licenses to use our projects under terms identical to the
MIT. But so far my actual development projects have mostly been in the realm
of "mildly useful for security auditing purposes" rather than "instrumental or
useful for companies" so I've mainly just MIT licensed everything.

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loumf
A sponsorship is very doable and tax deductible. So is a support contract. Or
buying a the docs in a the form of a PDF -- or anything I buy, really.

Donations are legal (I think), but might not be tax-deductible. All business
expenses are, though (since you pay taxes on profit). Rule of thumb --
business benefits from it. Donations are tax-deductible by individuals only to
the extent you don't benefit from it.

Also, Patrick is in Japan, where things might differ.

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taprun
It would probably be less questionable to take the money the firm would have
donated and tie it into the creation of new functionality by the software's
authors.

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sarciszewski
As an open source developer, I actually like this notion. A free software
developer might not ;)

