NFL Tax Exempt Status

[NoSaint]

 

 

Legal since 1966. Never invalidated. The NHL and NBA enjoy the same status. MLB gave up its exemption not long ago.

 

The teams make the vast amount of the money that is made by the league (97% if you extrapolate the info from the article). Half of that is paid to players, who are taxed at the local, state and federal highest levels. The rest is paid for team expenses and staff (who are also taxed). Any profit declared by teams is also taxed at the local, state and federal levels.

 

So really what seems to be at issue is the $260 million or so the "NFL" brings in as an entity. That would yield the "missing" $91 million in tax revenue they are currently exempt from paying. A symbolic amount by any standard when discussing corporate welfare or tax avoidance. Also, such a tiny amount could be easily made to disappear by the NFL so as to still yield zero tax revenue even without exempt status.

 

This is pure political haymaking. The congressman making hay about this knows it's BS.

 

Interesting, I'd read several times through the years "this is totally unique to the nfl"

 

Time to get reading!

[Spiderweb]

If anyone here sincerely believes Corporations pay too much in taxes already they one need to share with us what it's like to live the life of an ostrich, with their head buried in the sand. Yes, on the surface our corporate tax rates seem high in comparison to some other countries, but are they really? How can the tax rate be too high when corporations like Exxon, GE, and large percentage of the fortune 500 companies pay ZERO and in fact like GE, receive huge TAX CREDITS? Tax rates in many cases have been made moot for both corporations and the very rich through tax breaks and loopholes they have paid handsomely for through lobbying and in campaign contributions to pandering politicians. Because everyone who works for a corporation pays taxes is not a valid argument the corporations should pay zero. Lastly, no one likes paying taxes but you may wish to look at our tax rates in comparison to countries like Germany who's taxes are drastically higher than ours and there are numerous others. Yet the misinformation continues. Facts be damned.

[Fingon]

If anyone here sincerely believes Corporations pay too much in taxes already they one need to share with us what it's like to live the life of an ostrich, with their head buried in the sand. Yes, on the surface our corporate tax rates seem high in comparison to some other countries, but are they really? How can the tax rate be too high when corporations like Exxon, GE, and large percentage of the fortune 500 companies pay ZERO and in fact like GE, receive huge TAX CREDITS? Tax rates in many cases have been made moot for both corporations and the very rich through tax breaks and loopholes they have paid handsomely for through lobbying and in campaign contributions to pandering politicians. Because everyone who works for a corporation pays taxes is not a valid argument the corporations should pay zero. Lastly, no one likes paying taxes but you may wish to look at our tax rates in comparison to countries like Germany who's taxes are drastically higher than ours and there are numerous others. Yet the misinformation continues. Facts be damned.

This post is pure hogwash. Want to know how much income taxes Exxon Mobil paid last year? $31 billion. Just because the money doesn't go to the US treasury, doesn't mean it's not taxed. The only way to fix the system is to say "Hey Exxon, pay me that $31 billion, not other governments".

[brucethomas34]

It should be removed in my opinion ... and immediately.

 

http://sports.yahoo....-004521453.html

 

Tax's are not cool

[GG]

I just read the article.

 

Let me start by saying that I believe that both individuals and corporations pay too much in taxes in this country.

 

I also believe that the amount in question (in the grand scheme of things) is insignificant.

 

Also the piece is written by Doug Farrar who's an excellent football writer but is quite possibly not qualified to editorialize on this subject.

 

That said, I'm troubled by the idea that the NFL can enjoy the same status as, for instance, a Chamber of Commerce.

 

In addition, there's some sort of shell game going on with the NFL's money.

 

I think it's a very fair question as to whether this is an appropriate tax status for professional sports leagues.

You are correct, Farrar is way over his head in this article. He totally mixes the taxable entities in trying to make his point.

[NoSaint]

I just read the article.

 

Let me start by saying that I believe that both individuals and corporations pay too much in taxes in this country.

 

I also believe that the amount in question (in the grand scheme of things) is insignificant.

 

Also the piece is written by Doug Farrar who's an excellent football writer but is quite possibly not qualified to editorialize on this subject.

 

That said, I'm troubled by the idea that the NFL can enjoy the same status as, for instance, a Chamber of Commerce.

 

In addition, there's some sort of shell game going on with the NFL's money.

 

I think it's a very fair question as to whether this is an appropriate tax status for professional sports leagues.

 

having read it the other night....

 

i dont feel like i understand the situation all that much better. as you mentioned, he seemed out of his comfort zone understanding the issues at hand - and didnt do great with presenting the subtlety involved in some of it. behind the curtain theres a lot of moving pieces that make up the nfl, and while the nfl might be playing a bit of a shell game it seems like he went too extreme the opposite way and just tossed everything into the same bin...

 

as to the chamber of commerce comment... its an interesting discussion. if the greater NFL is a for profit, it would seem that its a for profit for the franchises and those franchises owners but not as much when you bring it back to the more targeted "league headquarters" segment. when you strip away the franchises the nfl itself is sans owner, sans shareholder, etc... its a governing body for the betterment and organization of a collective group of businesses, in some ways like a chamber can function and those individual groups are definitely taxed on their revenues and incomes.

 

but like i said, i dont know enough of the actual structure on paper, legally, taxably, etc... to really get into the meat and potatoes of the discussion and this was not the article to change that.

Edited May 24, 2013 by NoSaint

[NoSaint]

http://profootballtalk.nbcsports.com/2013/05/26/nfl-keeps-looking-to-expand-business-footprint/

 

This move feels like its risking that nonprofit setup a little.

[Greybeard]

While we are on the topic of taxes. When a player plays for the Bills, he pays state taxes, I assume. So if he plays for the Dolphins, he pays no state taxes? Is this true?

[NoSaint]

While we are on the topic of taxes. When a player plays for the Bills, he pays state taxes, I assume. So if he plays for the Dolphins, he pays no state taxes? Is this true?

 

Nfl salary is 16 game checks so you pay in the state the games played, so true for 8 (buffalo 7) home games.

 

Bonus dollars I've never seen discussed but I'd guess home state as well?

[Mr. WEO]

While we are on the topic of taxes. When a player plays for the Bills, he pays state taxes, I assume. So if he plays for the Dolphins, he pays no state taxes? Is this true?

 

http://forums.twobillsdrive.com/topic/157344-nfl-and-taxes-i-never-knew-this/

[Just Jack]

Update.....

 

http://www.businessweek.com/articles/2013-09-19/a-republican-senator-s-lonely-mission-to-make-the-nfl-pay-taxes

 

Oklahoma Senator Tom Coburn introduced a bill yesterday that would strip the National Football League of its tax-exempt status. The PRO Sports Act proposed by the Republican lawmaker would prohibit professional sports organizations with annual revenue of more than $10 million from filing as nonprofit organizations. In addition to the NFL, the bill would also change the status of the National Hockey League, golf’s PGA Tour, and the ATP World Tour in tennis, among other professional sports groups.

 

There's also a petition...

 

http://www.change.org/NFLnonprofit

 

The Commissioner of the NFL, Roger Goodell, makes nearly $30 million a year -- earning more than the heads of companies like Coca-Cola and Wal-Mart. Through TV deals alone, the NFL has inked nearly $30 billion with various television networks. And so often, fans like you and me are asked to foot the bill for new stadiums through our own taxes. Yet despite being the most profitable sports league in the entire world, the NFL does not pay federal taxes.

[KD in CA]

Well, the teams already pay taxes on their individual profits. Players pay taxes on the paychecks they collect. Executives in the front office of the NFL as an organization pay taxes as well. I didn't see anywhere in the article saying the the NFL as an organization is hoarding money. As such, are you advocating that double taxation of income is OK? A collection of team owners functioning as a 501©(6) doesn't seem improper to me on any scale. Taxes are already being paid on everything the NFL earns.

This.

 

I'm in agreement with the premise if there is evidence the NFL is effectively a for profit entity that is shielding income, but if it's just the pass through mechanism for the 32 member teams, it sounds like double taxation to me. If the best evidence the author can come up with is 'they pay all the profits to the executives', it doesn't sound like he's got much of a case. Which is not surprising since I don't think Doug Farrar is a forensic accountant with access to the NFL's books, making his opinion pretty much worthless.

 

Nfl salary is 16 game checks so you pay in the state the games played, so true for 8 (buffalo 7) home games.

 

Bonus dollars I've never seen discussed but I'd guess home state as well?

I would assume that bonus dollars received need to be allocated among the states in line with your salary allocation. Which could create some interesting tax planning. I suppose you could schedule higher salary and bonus payment years in those seasons where you play games against teams in low tax states. Now that's some fun work for an accountant!

[ICanSleepWhenI'mDead]

. . . I would assume that bonus dollars received need to be allocated among the states in line with your salary allocation. Which could create some interesting tax planning. I suppose you could schedule higher salary and bonus payment years in those seasons where you play games against teams in low tax states. Now that's some fun work for an accountant!

From Forbes about 6 months ago:

 

http://www.forbes.co...f-u-s-tax-code/

 

Unlike most of us, athletes can receive millions in signing bonuses. These bonuses are exempt from most states’ taxes if they are paid separately from salary, non-refundable and also not contingent upon playing for the team. So if

Mario Williams

 

 

 

’ contract was written properly, the

Texas

 

 

 

resident would not have to pay a dime in taxes to

New York

 

 

 

(or any other state) on the $19 million signing bonus he received when he signed with the Bills last summer, a tax savings of $1.676 million. It is a safe bet that Buffalo’s payroll department allocated the bonus to New York and the other states in which the Bills played. It is up to his tax advisor to catch it and make the necessary adjustment.

 

The remainder of the article illustrates how complicated income taxes can be for pro athletes. The following article also sheds light on the complexity, and includes, among other things, a short discussion of US/Canada tax issues for pro athletes who play in both countries:

 

http://www.bankrate....te.aspx#slide=1

Edited October 2, 2013 by ICanSleepWhenI'mDead

[KD in CA]

From Forbes about 6 months ago:

 

http://www.forbes.co...f-u-s-tax-code/

 

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The remainder of the article illustrates how complicated income taxes can be for pro athletes. The following article also sheds light on the complexity, and includes, among other things, a short discussion of US/Canada tax issues for pro athletes who play in both countries:

 

http://www.bankrate....te.aspx#slide=1

Interesting, thanks for posting.