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Monday May 4, 2015

Washington News

Washington Hotline

NFL 'Punts' on Tax Exemption

In 1942 the IRS granted tax exempt status to the National Football League (NFL). While most of the billions of dollars the NFL receives each year from television rights, licensing agreements and ticket sales are distributed to the 32 teams and therefore taxable, the NFL League Office is tax exempt. This exemption has saved tens of millions of dollars in corporate income tax since 1942.

On April 28, NFL Commissioner Roger Goodell sent a letter to House Ways and Means Chairman Paul Ryan (R-WI) and Ranking Member Sander Levin (D-MI), and stated, “I write to inform you that the NFL owners have determined that the League Office plans to file returns as a taxable entity for our fiscal year 2015.”

NFL Commissioner Goodell also sent a copy of the letter to the 32 team owners. He observed that “the tax exempt status of the league office has been mischaracterized repeatedly in recent years.” With the adverse publicity for the NFL, Goodell indicated that “the League Office and Management Council [will] file returns as taxable entities, and the change in filing status will make no material difference to our business. As a result, the committee decided to eliminate this distraction.”

Members of Congress responded favorably to the NFL decision to drop exempt status. House Oversight and Government Reform Committee Chairman Jason Chaffetz (R-UT) and Ranking Member Elijah Cummings (D-MD) stated, “We are extremely pleased with the decision from the NFL to waive its tax-exempt status. Congress has tried to tackle this issue before, but we made it one of our committee’s priorities this year. It is rewarding to see such an important and positive step toward restoring basic fairness. We hope other professional sports organizations in similar situations will follow the positive example set by the NFL, and we look forward to rightfully returning millions of dollars to the Federal Treasury as a result.”

Published May 1, 2015

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