Senators push to eliminate NFL’s tax-exempt status, NFL responds

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Ahead of Super Bowl Sunday, a couple of lawmakers are trying to raise support for legislation aimed at ending tax breaks for professional sports leagues, including the NFL.

“Many of us will join with friends and neighbors to watch the Super Bowl and the start of the PGA Tour season,” Oklahoma Republican Sen. Tom Coburn and Maine Independent Sen. Angus King wrote in a Dear Colleague letter Tuesday. “Tax season is also upon us, and Americans will be calculating their bills to and refunds from Uncle Sam. But did you know several major professional sports leagues are exempt from this annual ritual? While average Americans are struggling to keep food on the table as the economy continues to waver, these multi-billion dollar businesses are scoring goals and hitting double eagles at the expense of taxpayers.”

Coburn introduced legislation in September that would prohibit professional sports organizations with annual revenues over $10 million from being categorized as tax-exempt 501(c)(6) groups, the same status as trade organizations.

“Tax earmarks are essentially tax increases for everyone who doesn’t receive the benefit.  In this case, working Americans are paying artificially high rates in order to subsidize special breaks for sports leagues.  This is hardly fair,” Coburn said at the time.  “This bill would require major professional sports leagues to be prohibited from qualifying as non-profit organizations under the tax code.”

This week, King joined the effort, calling Coburn’s bill — the PRO Sports Act — a “a common-sense issue.”

“I like the NFL, but I don’t think it’s unfair to ask their central office to pay its share in taxes,” he said.

According to a May analysis of the PRO Sports Act from the Joint Committee on Taxation, the legislation would generate $109 million more in tax revenue over ten years.

When asked about the push, NFL spokesman Greg Aiello offered The Daily Caller the text of a November opinion article written by the NFL’s outside tax counsel Jeremy Spector, explaining that “[e]very dollar of income that is earned in the National Football League – from game tickets, television rights fees, jersey sales and national sponsorships – is subject to tax. None of this income is shielded. Instead, the NFL’s 32 clubs pay tax on all of these revenues.”

Spector explained that the portion of the NFL that is tax-exempt is the NFL League Office, or the administrative portion of the league that writes rules, negotiates collective bargaining agreements, hires referees, etc.

“The league office acts as a trade association for the NFL clubs. In the same way that other trade associations support companies in other lines of business, it establishes rules and standard practices for its members, develops programs to help them run their operations more efficiently and profitably, and promotes the business in the broader community,” he wrote, explaining that the office does not generate income and the tax exemption does not extend to the NFL’s profit making endeavors.

According to King and Coburn however, these sports leagues can and should lose their tax exemption “without any business interruptions.”

“For example, Major League Baseball voluntarily switched its status in 2007. We have no excuse for reducing vital services to the needy or benefits like veteran’s pensions when special handouts like this one are still on the books,” Coburn and King concluded in their Dear Colleague letter.

NFL commissioner Roger Goodell was paid $29.5 million in 2012, according to the league’s IRS filings.

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