Should Professional Sports Leagues Retain Their IRS Exempt Status?

Posted on December 23, 2014

Currently, professional sports leagues, including the NFL League Office, National Hockey League, Professional Golf Association, Ladies’ Professional Golf Association and Association of Tennis Professionals, all have exempt status before the IRS.

Senator Cory Booker recently introduced a bill that would prevent professional sports leagues from claiming tax exempt status. Although this is not the first attempt to change the tax status of professional sports leagues, it is gaining some attention.

Do you think that professional sports leagues should be exempt from tax?

Here is the argument from both sides:

Professional Sports Leagues Should Remain As Tax Exempt

Despite the fact that the teams pay between $250-$300 million to the NFL each year in membership dues, most of that income goes towards salaries, office expenses, college draft/Superbowl and charitable functions. The NFL Offices play by the rules of the 1966 tax law and, if their tax status were to change, they would probably pay an additional $10 million dollars a year to the IRS, assuming that the rules stayed the same. The impact would be felt by the charitable organizations that benefit from the NFL, the functions they support and, possibly, the staff they employ.

Professional Sports Leagues Should Pay Taxes

Senator Booker has introduced a bill to remove the tax exempt status from professional leagues. While he hopes to raise $100 million dollars in ten years for domestic abuse programs. In removing the tax exempt status, he is attempting to address the manner in which the NFL has handled recent domestic violence scandals.

By revoking the tax exempt status, the NFL would pay approximately $10 million per year going forward. It would also affect a number of other professional leagues, therefore increasing monies to the government.

In 2007, Major League Baseball gave up their tax exempt status and, according to MLB spokesperson Matt Bourne, the league gave up their exempt status because they saw no business benefit to have it and, therefore, relinquished it. Source

What do you think?