Many sports fans are probably unaware that the National Football League has been afforded a nice perk from the IRS: the league enjoys tax-exempt status. Now NFL chief Roger Goodell and the billionaire owners of the NFL have agreed to give up that special tax status.
Announcing the move, NFL Commissioner Goodell told team owners that the “change in the tax status will not alter the function or operation of the league office or Management Council in any way.”
The NFL makes about $10 billion annually. The league, but not the teams that compose it, has been exempt from taxes since the 1940s.
“The income generated by football has always been earned by the 32 clubs and taxable there,” Houston Texans owner Robert McNair, chairman of the NFL finance committee, said in a statement sent to Breitbart Sports by the league. “This is the case whether the league office is tax exempt or taxable. The owners have decided to eliminate the distraction associated with misunderstanding of the league office’s status, so the league office will in the future file returns as a taxable entity.”
For years, the special status for the NFL has been a frequent target of Congress. Only a month ago, Congressman Jason Chaffetz (R, UT) had threatened to have the tax status reversed. “It’s an issue of basic fairness,” Chaffetz said last month. “The National Football League should have to pay taxes like everybody else.”
One thing that the exempt status forced the league to do, though, was to file a full, public report on salaries and expenses. Once the tax exempt status ends, that requirement won’t be an issue. The NFL will be able to largely keep its finances a secret.
But Goodell also noted that those who oppose the tax status have misunderstood the difference between the league office “NFL,” which enjoys tax-exempt status, and the “NFL” that comprises 32 teams, each of them taxed.
“The effects of the tax-exempt status of the league office have been mischaracterized repeatedly in recent years,” Goodell claimed. “The fact is that the business of the NFL has never been tax exempt. Every dollar of income generated through television rights fees, licensing agreements, sponsorships, ticket sales, and other means is earned by the 32 clubs and is taxable there. This will remain the case.”
With the NFL ending its tax exempt status, that leaves only the NHL with the exemption. Major League Baseball ended its special status in 2007.
Follow Warner Todd Huston on Twitter @warnerthuston or email the author at igcolonel@hotmail.com
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