The National Football League is ready to end its tax-exempt status. NFL Commissioner Roger Goodell informed team owners and U.S. Congress in his April 28 statement.
The Commissioner noted that the change in filing status will make no material difference to the organization’s business. The NFL is the biggest sports league in the U.S with a record $10 billion in revenue. Most of the revenue goes to the 32 teams, which already face taxation. All of the money coming from television rights fees, licensing agreements, sponsorships, and ticket sales is earned by the clubs. The clubs pay membership fees to the National Football League, which makes up most of the revenue that currently does not get taxed. In the 2012-2013 tax year, NFL reported $326,882,787 in total revenue – this amount will become subject to tax after the status change. Ending tax exemption will also mean the end of federal disclosure requirements that make officials’ salaries and other information available to the public.
Earlier in 2015, Rep. Jason Chaffetz, R-Utah, chairman of the House Oversight and Government Reform Committee, introduced the Property Reducing Overexemptions for Sports Bill to remove professional sports leagues from the list of tax-exempt organizations. The legislation would have provided that a professional sports league would not be tax-exempt if it had annual gross receipts in excess of $10 million. Rep. Chaffetz wrote to several professional sports leagues, asking if they considered voluntarily surrendering tax-exempt status.
According to Roger Goodell, the league has been studying its tax status for more than a year and full ownership approved the decision in March.
NFL will change its status this year and will file its last tax-exempt return for the year ended March 31, 2015.
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