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National Football League [ NFL ] tax exempt

BY LOUIS PETRONE

KONK LIFE COLUMNIST

National Football League’s league office generates $9.5 billion annually in revenues. Commissioner Roger Goodell last year was paid $44 million.

 

The NFL does not pay taxes on the $9.5 billion. The NFL does pay taxes on its merchandising revenues and in other inconsequential areas. None of which are included in the $9.5 billion in revenue.

 

The NFL is not a corporation. It is a nonprofit trade organization. Nonprofit and trade organization are to be viewed separately.

 

Nonprofits are viewed as doing useful unprofitable work. Work which corporations normally will not. The Chamber of Commerce and the American Red Cross are examples of not-for-profit organizations. Because nonprofits perform useful unprofitable activities, they are afforded special treatment under the U.S.Tax Code. They are tax exempt.     For whatever reason, professional football leadership since 1942 has been viewed as nonprofitable. They are recognized as trade organizations. An inexplicable designation.     In 1966, serious consideration was given to the merger of the National Football League and American Football League. Washington was involved. As was horse trading. Congress agreed to give the merged professional football league favorable tax treatment in return for the promise that a franchise would be awarded to New Orleans. One year later, the New Orleans Saints played its first professional football game.

 

An example of how our government works. You grease my hand, I grease yours.     U.S. Congress passed appropriate legislation in 1966 amending Section 501(c)(6) of the U.S. Tax Code to specifically add professional football and trade associations as entitled to tax exempt status.     The NFL, NHL and PGA are treated alike under the 501(c)(6) provision. Major League Baseball was also until 2007. In the 2007 time frame, a regulation came out that nonprofits had to disclose by annual report a form 990, setting forth the salaries of top execs.

Major League Baseball was against salary disclosures. They put knowledgeable and well paid tax attorneys to work. Major League Baseball gave up its tax exempt status after professional assurances they would not have to pay income taxes. And they have not.

 

The NFL’s tax exempt status is under attack/scrutiny in Washington at present. The cry is the NFL should not be accorded such status. Several congressional members have introduced legislation to deny the NFL the tax exempt status they have statutorily enjoyed since 1966.

 

The NFL has never been known to be generous to politicians, and their lobbying efforts over the years have been minimal. However in the last 18 months, things have changed. Significant dollars have been spent supporting political candidates and paying lobbyists.

 

Why all of a sudden after years of not caring? The reason is Daniel Snyder, the owner of the Washington Redskins.

 

Native American groups for eight years have been trying to get Snyder to stop using the term Redskins. They consider the name and also the team’s logo

disparaging. Snyder has adamantly refused.

 

North American groups are now driving Congress crazy with the demand. Congress is reacting. Congress has reached the point of sick and tired of the lambasting they get because Snyder will not change the name and logo.

 

As a result, horse trading time has returned between NFL and Congress. This time it is . . . get Snyder to cooperate or your tax exemption status is gone.

 

It is thought any favorable efforts to persuade Snyder and the NFL to cooperate would effectively kill a vote on tax exempt status. The bill introductions and bclamor by Congress to get rid of  NFL’s tax status is considered by many to be more symbolic than anything else.

 

Other reasons come into play why any legislation to deny NFL tax exempt status would fail.

 

In Washington’s present political climate, it would be difficult to get anything of substance passed. The NFL remains incredibly popular. As mentioned, the NFL is donating millions in campaign contributions to political leaders, plus throwing an army of lobbyists at them.

 

The big thing, however, is the NFL convincing Snyder to back off and change the name and logo. The pressure is there.

 

An example of how government works.

 

I believe that any major sport does not deserve tax exempt status. Not with the kind of money involved. The NFL is no different than any highly profitable corporation. We get upset that large corporations pay little or no tax. The NFL is no different.

 

Everyone should pay their fair share of taxes. No person or group should be given special consideration. As Professor Lloyd used to say in Constitutional law class….. What is good for the goose, is good for the gander.

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