Coburn, King Want to Sack NFL's Tax Exemption

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."