Why you should care
As a taxpayer, something about this arrangement doesn’t seem entirely fair.
National Football League Commissioner Roger Goodell may have apologized Friday and promised changes to the league’s personal conduct policy for players. But it’s unlikely enough to silence the NFL’s critics, who are inflamed over a host of off-field problems — everything from athletes’ domestic violence raps to a racist team name to the sport’s horrific concussion problem. And that could cost the league dearly.
Millions of dollars, in fact, in the form of a tax loophole the NFL uses to qualify as a nonprofit entity. All together, aides for crusading fiscal conservative Sen. Tom Coburn estimated that the loophole — used by the NFL, the National Hockey League and the Professional Golfers’ Association — cost taxpayers a minimum of $91 million in unearned revenue in 2012. That calculation was made for Coburn’s annual Wastebook, which documents all sorts of government spending and tax breaks the Oklahoma doctor considers a handout.
“These organizations are taking advantage of the provision of the tax code that allows industry and trade groups, such as the U.S. Chamber of Commerce or the Natural Resources Defense Council, to qualify as non-profit and tax-exempt,” the Wastebook notes. Meanwhile, the NFL “holds over $1 billion in assets,” according to its IRS filings.
But every so often, when the NFL or one of its professional sports counterparts runs afoul of the American public, members of Congress threaten to revoke that status. Coburn himself has spent years trying to strip this particular provision from the tax code. And with the football league in the doghouse in a big way right now, you can once again hear the howls rising from Capitol Hill.
On Sept. 16, Washington Sen. Maria Cantwell announced she was introducing legislation to toss the tax exemption for the NFL over Washington, D.C.’s team name — the Redskins. Many Native Americans consider it a slur. But Washington owner Dan Snyder has refused to budge, and the NFL hasn’t forced the matter. So Cantwell, the onetime chair of the Senate’s Committee on Indian Affairs, decided to play a little hardball.
A similar proposal was included in a House tax reform bill introduced last winter.
The problem, from critics’ point of view, is that the NFL plays hardball well, too. The organization spent more than $1 million lobbying the federal government in 2013 alone.
So while pro football may be facing the firing squad right now, it’s going to take a far more sustained effort to yank its cushy tax status. Just ask Coburn.
The likelihood is we’ll all be floating football on any given Sunday for the foreseeable future. Pass the wings.