Why Does the National Football League Deserve Tax-Exempt Status ? (1 Viewer)

[rstrauss33]

Good point. As an example, CEOs of non-profit hospitals often make embarrassingly large salaries.

True as do universities, but the NFL is clearly a for profit business, with a sweetheart tax structure that any major corporation would love to have. In general, non profit just means there are no shareholders to whom profits are distributed. But as you say top staff can still get paid well. We can debate whether non profits at all should enjoy this status but I can't think of why the NFL especially deserves the break. If NFL revenue not distributed to the teams were taxed the teams and players would make a bit less they're still be very profitable and I doubt it would have an impact on the quality of play.

 

[rstrauss33]

That was also meant to respond to Lurkaholic.

 

[Lurkaholic]

True as do universities, but the NFL is clearly a for profit business, with a sweetheart tax structure that any major corporation would love to have. In general, non profit just means there are no shareholders to whom profits are distributed. But as you say top staff can still get paid well. We can debate whether non profits at all should enjoy this status but I can't think of why the NFL especially deserves the break. If NFL revenue not distributed to the teams were taxed the teams and players would make a bit less they're still be very profitable and I doubt it would have an impact on the quality of play.

There's certainly an argument to be made that their structure is a bit ridiculous. I wouldn't necessarily disagree with that, although it is perfectly legitimate on paper. I think the real problem with disallowing their non-profit status is the potential ramifications it could have on other organizations (arts organizations and certain hospital systems, in particular) that could by destroyed by a disallowance of their statuses. The bigger problem with the NFL, to me, is that they play both sides of the fence with this issue. When it's revenue-convenient, they are 32 individual teams. When it's legally-convenient, they want antitrust status as a single unit. FWIW, the Supreme Court ruled in 2010 that they are "an unincorporated association of 32 teams and not a single unit."

 

[SAINTSFAN]

How is it significantly different from an LLC or S Corp where the profits of the corporation flow through to the owner to be taxed?

 

[Lurkaholic]

How is it significantly different from an LLC or S Corp where the profits of the corporation flow through to the owner to be taxed?

The owner of that business owns all of the profits he makes.

 

[duhonmark551]

The NFL was clamoring for that tax exempt status in 1966, and the La politicians Boggs, Ellender or Long cut a deal to add that amendment in exchange for a NFL expansion team in NOLA.

That was back when government was useful.

 

[Cowcontrol777]

Good point. As an example, CEOs of non-profit hospitals often make embarrassingly large salaries.

I can't imagine that payroll of other legitimate non-profits can come close to match the NFL's payroll. It seems to me that some sort of employer payroll tax should apply.

Side question. What about the NFL Network? Is that a separate business? It has to be, right?

 

[Lurkaholic]

I can't imagine that payroll of other legitimate non-profits can come close to match the NFL's payroll. It seems to me that some sort of employer payroll tax should apply.

Side question. What about the NFL Network? Is that a separate business? It has to be, right?

As far as I'm aware, all non profits pay payroll taxes at the federal level just like any other business. What we are talking about here are taxes on corporate income before payroll.

I have no idea about your second question. If I had to guess, the main NFL is set up as a nonprofit because it maintains that it exists as an organizing and charitable arm while the teams themselves exist independently and bring in the profit. Therefore I would guess NFL Network would exist separately just like the teams do.

 

[2009ring]

For a non-profit, Goodell argued pretty vehemently regarding players and referee's salaries during their respective lockouts..........

 

[VPCajun]

Brian Frederick: Why Does the National Football League Deserve Tax-Exempt Status?

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Well, duh - cuz we have the best politicians that MONEY CAN BUY!

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[FullMonte]

The owner of that business owns all of the profits he makes.

And, if the business has 32 owners? Don't those 32 owners own all of the profits that business makes?

 

[boutrous]

Why don't the NBA, MLB, or the NHL enjoy the same status?

Easy answer: lobbying.

The NFL was clamoring for that tax exempt status in 1966, and the La politicians Boggs, Ellender or Long cut a deal to add that amendment in exchange for a NFL expansion team in NOLA.

That.

 

[RickKoper]

And, if the business has 32 owners? Don't those 32 owners own all of the profits that business makes?

Yes, and they also pay taxes on those profits. All of NFL money goes back into the business, and anyone that makes a salary gets taxed. So all of the money is taxed, it's just not the responsibility of the NFL to pay them since they make no profit as an organization.

This really isn't a big deal.

 

[CRESS_137]

The only ones that deserve it in my eyes are true non-profits.
Not churches, not sports leagues, none of that.

 

[RickKoper]

Do you realize that in order to be a non-profit, you have to not have any profits? What would there be to tax? They aren't hiding money, they are paying expenses and salaries, you can't tax that as profit. It gets taxed on the employee side.