NFL tax-exemption status comes under fire
" ... The latest to join the anti-tax exemption effort was Sen. Angus King (I-ME), who US News reported was motivated by the enormous sums of tax-free money involved, specifically the $30 million a year paid to NFL Commissioner Roger Goodell. "
Thirty million tax-exempt??!! That seems ludicrous to me! Almost criminal!
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"Most people don't know they are not-for-profit entities, and when people find out, it strikes them as ridiculous," Lynda Woolard, a New Orleans community activist who authored a Change.org petition to stop the exemption, told USA Today . "We have a corporation running as a non-profit and getting the benefit of a non-profit but not acting in the public good."
Prior to Sen. King coming aboard, Coburn had enjoyed little success in this effort.
"No other senator has signed on to co-sponsor the bill," USA Today reported in December. "He cites the industry's clout on Capitol Hill. The NFL alone has spent more than $5 million on federal lobbying since Jan. 1, 2010, federal records show.
"If you are in a state that has a pro football league or runs a pro golf tournament, the career politicians are afraid to touch it," Coburn said in December, according to the USA Today report.
The NFL is not pretending to be a charity, ESPN notes .
"Before you start comparing the NFL to the American Red Cross, it's important to know how and why the NFL is a tax-exempt organization. According to league spokesman Brian McCarthy, the NFL is organized as a trade or industry association that is exempt from taxation under Section 501(c)(6) of the Internal Revenue Code, not Section 501(c)(3), which exempts charitable organizations," ESPN said. " (My emphasis)
http://www.deseretnews.com/article/865595432/NFL-tax-exemption-status-comes-under-fire.html
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Did you already know all about this? I didn't. I looked at another definition, and I'm still skeptical on 'why' 501 (c) (6) is necessary... why should they be tax exempt all ? And, giving them the ability to lobby Congress just means they can pay somebody to keep it that way. ...
Answer from PamPerdue
501(c)6s have more politcal freedom
Sources: (c)#501.28c.29.286.29
I knew about it Chole, the NFL and the PGA and I think the NHL. Just another screwing of the the public, and lining the pockets of the ilk of Goodell. I don't know if his pay is exempt from taxes though.
Once again, our politicians of both parties are little more than whores.
Hi Kav, US News reports that Goodell's 30 million is tax-exempt. That's absurd. I didn't know the Leagues don't have to pay to rent the state's stadiums, either. I don't know if ticket sales are considered 'donations,' or not, but I think they should be.
And, all of that money they make from sports channels on both Sunday and Monday night coverage (it was stated by someone that ESPN pays them 2 billion a year for *just* Monday Night Football, add in all of the other channels and Sunday coverage - plus it was stated by someone that 60% of cable bills is to pay for sports channels - by everyone that uses cable.
For sure!
Egilman, thank you for the informative, detailed reply. I don't doubt what you say, but when I followed my links, one of the reports made it sound like Goodell, being on the League side, rather than the 'club' side, would be tax exempt as well. However, it was confusing with their pointing out that paying salaries and compensations, making it sound as though those were 'separate,' as you suggest, for taxation. For example, 1) this statement caused me to think Goodell would be tax-exempt:
Goodell isn't in a 'club' but is part of the league office as Commissioner, yes?
2) Goodell (or another) fills out the form 990 tax exempt form for the League, so that also had me thinking his 29 million was part of the tax exempt status. Maybe he files another one on himself?
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Here's a copy of his filing taxes for the League at this link (40 pages).
Somebody has to do their (League) taxes, but it seems like it would be addressed to the League, not an individual, as the form is addressed to him. Do you think it's possible that Goodell's wage gets the tax exempt status after looking this over?
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To reiterate, I don't doubt you. I'm just asking if you get a different conclusion after seeing the tax form made out to Goodell instead of the League itself.
I appreciate your knowledge and offerings on this matter.
Chloe,
In my opinion, the laws allowing for a non-profit status for so-called professional sports is bullshit. There is this canard that local businesses benefit from sports being played in their area and indeed there are "some", but overall, all the money flows out of the community, never to return.
When the loser Milwaukee Brewers had legislators ram through a tax in southeastern WI to pay for their new stadium, there was a promise of local payback which has never happened.
The league itself is tax exempt but not the individual teams nor the players. Some of the local taxes around the country are completely absurd also. You have players that must pay taxes in all of the cities in which they play. For the NFL it would be taxes paid to 32 different cities and some of those cities have a tax rate over 50% if I remember correctly. It wouldn't be taxes on their overall salaries, just the portion they made while playing in that city.
The point is that there is a significant amount of tax money flowing into these cities. I would probably be ok with the league itself being taxed more, I just want the conversation to be honest instead of pretending like these sports leagues don't pay any taxes at all.
Sorry Aeon but I disagree. The taxes and economic benefits from these games taking place in these cities is well worth it. For baseball you have on average over 2-3 million people a year coming into the city to see these games and they spend their money in many ways mostly supporting the local businesses. For a small city such as Milwaukee it is even more important.
Sure there are some large cities such as New York or LA that could afford to build their own stadiums but for the majority of the league the economic benefit to the city is well worth the tax investment into the stadiums.
True enough BUT the canard here is this mythical, non-proven lie that ALL professional sports provide a long-term economic benefit to the surrounding community.
Dan, do you have proof of this? Any studies or research that confirms that? The Milwaukee Journal did their own research a few years ago when this tax came up and found the benefit to the city was less than negligible.
I'll have to look into the Milwaukee situation Aeon. I would be interested to learn about what they found.
I live near Pittsburgh which is very similar to Milwaukee in size and we've had three new sports facilities built over the last decade or so. It was a hot topic here when it was all being debated. I'm not sure if there were studies done but I would like to find out. One thing I can remember quite clearly was the economic impact of the lockout last year in the NHL. It had a major impact on the local business. There were definitely news stories about it.
I'll try to look into it and post whatever info I can find.
MLB dropped the tax exempt status in 2008. It doesn't seem to have done damage to them. The NBA is not exempt.
The NFL, should be paying taxes, as should the PGA and the NHL.
Dan, your correct, the teams and players do pay taxes.
Ok, thanks. That's too bad you can't access that site. I didn't have to join anything; it takes me right to that report that shows the 990 form addressed to him. Yes, it stated that he is the Commissioner. It also made the statement that the League collects dues and other income from the clubs that amounted to 245 million that year, I think (I'm not sure, I should go back to the report), but the League only paid out 2.4 million of that, I believe it said.
I thought it was all very interesting, and nice to know that the clubs pay taxes. I appreciated your comments on why the League gets that status.
APax, I agree with you. Some goes into the small businesses during games, but it looks like most goes to the League, and only a very, very small percentage is paid out from their income from the clubs. From what I can tell from other reports, a bulk of their tax exempt monies is used to pressure cities, pitting them against each other to get locations for their clubs, as well as pressuring state sanctions.
The report I highlighted stated that Baseball voluntarily gave up the status. Two Senators are working to get the status removed from the other Sports (Football, Golf, Hockey and whoever else).
Egilman, I'm not doubting you, just curious. Do you mean during games, and the surrounding businesses benefit, or do you mean they give donations to certain businesses?
Dan Sauers,
That's a very good point that the clubs are bringing in dollars to the cities in which they play. Glad you made that point. I still think the club or the League should pay to rent the stadium they use.
Everyone,
So are the NJ taxpayers getting the shaft after the Super Bowl?
Part of the reason the Milwaukee markets get little benefit is because nobody sticks around after the game. Milwaukee is a boring city.
Oh, that pressuring they do -- is why Seattle lost the Supersonics and why LA lost two football clubs.
Apparently, the League uses LA as a bribe. They threaten other cities that if they don't get what they want, they'll move the city's club to LA.