Tax Law

NFL's Tax-Exempt Status In Jeopardy?

 One of the hot tax topics in 2014 has been the National Football League (NFL) and the league’s tax-exempt status.   Various legislative actions have been introduced to potentially eliminate or minimize the league’s exemption.   Most recently, Senate Finance Committee Member Maria Cantwell, D.-Wash., (along with Senators Harry Reid, D.-Nev., and Tim Johnson, D.-SD) introduced a bill on September 18, 2014 to revoke the NFL’s 501(c)(6) tax-exempt status, as well as the tax-exempt status of any professional sports league, that promotes the use of the term “redskins.”  See "Cantwell Announces Bill to Revoke NFL Tax Exemption,” taxanalysts® Tax Notes Today, Sept. 19, 2014.

Around the same time as Senator Cantwell’s proposed legislation, New Jersey Senator (and former college football player) Cory Booker introduced The Securing Assistance for Victim Empowerment Act  (the “SAVE Act”) (SB 2816), which would also remove the NFL’s tax exception and those of other Section 501(c)(6) sports leagues, including the NHL.  The SAVE Act would use revenue raised from the elimination of the NFL’s exemption to provide greater funding for combating domestic violence.  See "Booker Announces Bill to Repeal Sports League Exemption,” taxanalysts® Tax Notes Today, Sept. 16, 2014.

In 2013, Senator Tom Coburn, R.-OK, introduced a bill to enact the Properly Reducing Overexemptions for Sports Act (SB 1524), which would strip the tax exemption of all professional sports leagues.  See “S. 1524 Would Deny Tax-Exempt Status to Professional Sports Leagues,” taxanalysts® Tax Notes Today, Sept. 25, 2014. House Ways & Means Committee Chair Dave Camp also raised and called for repealing the Section 501(c)(6) exempt status of all pro sports leagues in his tax reform discussion draft.   See “Camp Discussion Draft Would Provide Comprehensive Tax Reform,” taxanalysts® Tax Notes Today, Feb. 27, 2014.

The NFL has had income deemed tax exempt since the 1940s, but some practitioners have questioned why the league is exempt and the issue could definitely wind up being on the list of items to be addressed with respect to potential tax reform. 

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