Republican: Strip NFL’s tax-exempt status

Rep. Jason Chaffetz (R-Utah) on Wednesday proposed legislation that would strip the National Football League’s tax-exempt status.

Chaffetz said professional football and hockey leagues are for-profit entities that don’t need an unfair tax break. He offered the measure days before the Super Bowl, the nation’s most popular sporting event of the year.

“In reality, the NFL and the NHL are for-profit businesses, and they should be taxed as such,” he said. “They are not charities nor are they traditional trade organizations like local chambers of commerce.”

{mosads}The NFL is easily the nation’s most popular professional sports league, and its annual revenues have soared to about $9 billion. Recent reports said NFL Commissioner Roger Goodell earns about $30 million per year.

The National Basketball Association has never been tax exempt, and Major League Baseball gave up its tax-exempt status in 2007, in part to allow it to keep its salary information private.

Chaffetz noted that while teams in the NFL and the National Hockey League are currently taxable, their leagues are not. His bill, H.R. 3965, would require any pro-sports league with revenues above $10 million be treated as taxable entities.

Chaffetz called current tax-exempt status for these leagues a “loophole” that he wants to close as part of a broader tax reform effort.

“My hope is that H.R. 3965 will become part of a comprehensive tax reform bill that would lower rates and broaden the base,” he said. “I am not looking for additional tax dollars for the federal government. Closing this loophole should be combined with closing several other loopholes in order to lower tax rates in a revenue-neutral manner.”

He said ending tax-exempt status for professional sports leagues would increase federal revenues by $109 million over 10 years.

Chaffetz’s bill is similar to one introduced last year by Sen. Tom Coburn (R-Okla.). Coburn’s S. 1524 would also set a $10 million revenue threshold, above which sports leagues would be taxed.

“Tax earmarks are essentially tax increases for everyone who doesn’t receive the benefit,” Coburn said in September. “In this case, working Americans are paying artificially high rates in order to subsidize special breaks for sports leagues. This is hardly fair.”

Just this week, Sen. Angus King (I-Maine) said he supports Coburn’s bill. “This is just a common-sense issue to me,” he said. “I like the NFL, but I don’t think it’s unfair to ask their central office to pay its share in taxes.”