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The PJ Tatler

by
Bridget Johnson

Bio

January 31, 2014 - 12:45 pm

Sens. Angus King (I-Maine) and Tom Coburn (R-Okla.) have been using Super Bowl week to promote their new bill that would end the NFL’s tax-exempt status.

The PRO Sports Act would amend the tax code to prohibit professional sports organizations with annual revenues of more than $10 million from enjoying the same tax-exempt, 501(c)(6) status as industry trade associations and public interest groups.

Coburn said on CNN that the NFL can’t pass itself off as a trade group as “they don’t represent arena football.”

“They represent only the NFL. And the tax code specifically says in terms of trade associations you can’t promote any brands. And they promote all the brands within the NFL only,” he said. “…Every other American pays a little bit more every year because we give the NFL league office a tax break and call them a nonprofit, which, in fact, they’re not.”

“The NFL doesn’t promote college football, high school football, arena football. It’s a group of teams. And by the way, I’m a huge NFL fan. I mean, sponsoring this bill may be wiping out my possibility of being a quarterback for the Redskins, which is a lifetime goal,” King quipped. “But, you know, I just don’t think this is right. How do I look at my constituents in Maine and say you’ve got to pay a little bit more income taxes so these guys can be tax-free at this entity that’s bringing in millions of dollars a year?”

“If this is truly a tax-exempt organization, how is it that 20 percent of the revenue that comes in goes to one individual in the organization?” Coburn added.

Several pro sports leagues in addition to the NFL, such as the NHL and PGA, have central offices registered as 501(c)(6) tax-exempt organizations, which allows the opportunity for their revenue to be tax-free. To qualify under current law, the leagues must state that their purpose is to help promote their respective sports and membership instead of themselves.

The Joint Committee on Taxation estimates that closing the loophole would save taxpayers approximately $109 million over 10 years.

“Major League Baseball dropped this in 2008. The NBA is not taking advantage of this — and rightly so, because they aren’t a trade association. They know they’re not a trade association,” Coburn said.

“I think you need to look at this bill as pulling up the corner of a big tent, because I think everybody around here agrees that we’ve really got to look at the tax code and what they call tax expenditures, because every time somebody gets a tax break, that means somebody else has to pay more,” King said.

King quipped this morning on MSNBC that he’s now probably “the only guy in America who has to go to an NFL game under the witness protection program.”

“The NFL has a foundation that does charitable work. That’s tax exempt. Nobody is questioning that. We’re talking about the league office, which by the way pays the boss $29 million a year. How many nonprofits do you know pay their executive director $29 million a year? You know, it just sort of is ridiculous,” the Maine senator continued.

“That exemption was in the law to exempt organizations that represented large groups in a whole industry. The National Association of Manufacturers. The NFL is a brand. It doesn’t represent football. It doesn’t have anything to do with high school football, or arena football, or college football. It is a brand representing the teams, the very highly profitable teams, and that’s different than a broad association of groups of people, the National Skiing Association or something, that represented a whole sport. This is a brand. And I think that’s what really — what the difference is.”

Bridget Johnson is a veteran journalist whose news articles and opinion columns have run in dozens of news outlets across the globe. Bridget first came to Washington to be online editor at The Hill, where she wrote The World from The Hill column on foreign policy. Previously she was an opinion writer and editorial board member at the Rocky Mountain News and nation/world news columnist at the Los Angeles Daily News. She is an NPR contributor and has contributed to USA Today, The Wall Street Journal, National Review Online, Politico and more, and has myriad television and radio credits as a commentator. Bridget is Washington Editor for PJ Media.

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Top Rated Comments   
This tax-exemption is and always has been obscene, rich people feeding off tax payers who can not afford to go to a game, but can sure pay for a new stadium.
46 weeks ago
46 weeks ago Link To Comment
All Comments   (8)
All Comments   (8)
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Why is government's answer to a "problem" always to INCREASE taxes? Can't they make it "fair" by reducing everyone's taxes?

I'm taxed probably 30 ways. Why not cut one of those taxes that directly effects me instead of raising someone else's taxes that won't really help me one cent?

How about abolishing one of the federal taxes on my cell phone, for starters? That would directly help me.
45 weeks ago
45 weeks ago Link To Comment
They used a crony-capitalist way of shoving their expenses into the public, and privatized the profits.

They should pay the same taxes, at the same rates, as you and I, as well as the businesses we work for.

Now, if King wants to suggest that you and I get the same *break* as the NFL, I'm all for that, too!
45 weeks ago
45 weeks ago Link To Comment
With $billions in TV revenues plus merchandising profits and tax breaks shouldn't the NFL be taxed the same as any other industry? These gys (NFL owners) have some great lobbyists in Washington.
45 weeks ago
45 weeks ago Link To Comment
Before we jump to conclusions, is the tax exemption for the 32 individual teams (where most of the money is received and spent) AND the NFL umbrella or is it only for the NFL, which is like the glue that holds the 32 teams together?

I want to also point out that what are called reasonable exemptions at one moment, can be represented as a loophole the next.

I work in construction and there are trade organizations that perform marketing, research, and keeps an eye out for laws & lawsuits that might affect the trade. These are valuable services that benefit mom-and-pop shops as well as the big players.
46 weeks ago
46 weeks ago Link To Comment
It's unreal. I had no idea this was the case until this morning.
46 weeks ago
46 weeks ago Link To Comment
Yeah, the NFL is a non-profit organization. Right. Funny stuff. Right up there with Move-On.org. and all the rest of 'em.
46 weeks ago
46 weeks ago Link To Comment
This tax-exemption is and always has been obscene, rich people feeding off tax payers who can not afford to go to a game, but can sure pay for a new stadium.
46 weeks ago
46 weeks ago Link To Comment
There's so much obscene about the NFL and pro sports in general. I found out that the real reason that broadcast television went digital was so that cable providers could begin charging extra for carrying local network television channels because they carry pro sports.

I had my cable shut off after noting incremental monthly increases right after over the air television broadcasting ended. When I called to inquire as to the reasons behind the unannounced increases I was told "sports programming". Having only been subscribed to the bare basic package- which was local channels and C-SPAN with no ESPN, etc., I protested that I was not receiving any sports channels. The person taking my call said it was the local network stations because they carry pro sports programming.

At that point I immediately requested that my cable services be shut off. These bits of stealth revenue enhancement go to an entity that is so flush with revenue that it can pay out multi-hundred million dollar contracts to individual players and whose base salary is seven figures yet the owners STILL pull home a handsome profit and that was yet another sneaky way to get the unwitting to finance it- by attaching a money siphon to the lowest price media package when over the air rabbit-ears received broadcast went away.

Taxpayers are already financing it by picking up the tax burden not being borne as provided by the exemption. It would be very interesting to gauge reactions to those struggling to make ends meet in this economy when they are informed that their bare basic cable services are cost inflated to provide an additional revenue stream for professional sports.
45 weeks ago
45 weeks ago Link To Comment
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