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Why Isn’t the NFL Taxed?

Go buy nfl gear, game, etc and check the receipt.
 
Section 501(c)(6) of the Internal Revenue Code provides for the exemption of business leagues, chambers of commerce, real estate boards, boards of trade and professional football leagues, which are not organized for profit and no part of the net earnings of which inures to the benefit of any private shareholder or individual.

Basically the league has non profit status because they aren't publicly traded and money made is used to fund the league. Whether or not this is fair or the way it should be is up for debate and i am sure it will be.
 
Ryan25 said:
Section 501(c)(6) of the Internal Revenue Code provides for the exemption of business leagues, chambers of commerce, real estate boards, boards of trade and professional football leagues, which are not organized for profit and no part of the net earnings of which inures to the benefit of any private shareholder or individual.

Basically the league has non profit status because they aren't publicly traded and money made is used to fund the league. Whether or not this is fair or the way it should be is up for debate and i am sure it will be.
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Exactly.

Most people don't understand that "non-profit" doesn't mean "not profitable". Many non profits generate huge amounts of money.

Now, with specific regard to the NFL, unless I'm mistaken there was a little niche cut out specifically for them and, I believe, the NHL. The 501(c)6 exemption is supposed to be for youth leagues, chambers of commerce and the like but as long as the NFL adheres to the rules.....
 
Lutherf said:
Exactly.

Most people don't understand that "non-profit" doesn't mean "not profitable". Many non profits generate huge amounts of money.

Now, with specific regard to the NFL, unless I'm mistaken there was a little niche cut out specifically for them and, I believe, the NHL. The 501(c)6 exemption is supposed to be for youth leagues, chambers of commerce and the like but as long as the NFL adheres to the rules.....
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While they are (most likely) adhering strictly to the letter of the law, I'd bet that most people would not approve of them not paying taxes if they knew about it.
 
I'm going to assume while the league itself is a NP, the individual teams aren't.
 
ecofarm said:
Go buy nfl gear, game, etc and check the receipt.
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I'm sure the private distributors of NFL merchandise are taxed, and we certainly DO pay sales tax on the merchandise: however, I think the point is that as a "business organization" the NFL is exempt from paying income tax........which indeed leads to this valid question of tax exempt status.......... considering it reported revenues of over $9 billion in 2008, according to the article, and it's executives are routinely payed six and seven-figure salaries. :shrug:
 
FluffyNinja said:
I'm sure the private distributors of NFL merchandise are taxed, and we certainly DO pay sales tax on the merchandise: however, I think the point is that as a "business organization" the NFL is exempt from paying income tax........which indeed leads to this valid question of tax exempt status.......... considering it reported revenues of over $9 billion in 2008, according to the article, and it's executives are routinely payed six and seven-figure salaries. :shrug:
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What does the organization itself really own? Team owners, coaches, players, fans all pay tax. You're gonna tax an organization for existing, according to the assets within the organization's members?
 
ecofarm said:
What does the organization itself really own? Team owners, coaches, players, fans all pay tax. You're gonna tax an organization for existing, according to the assets within the organization's members?
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But they made money.......we have to get some of that away from them.
 
ecofarm said:
What does the organization itself really own? Team owners, coaches, players, fans all pay tax. You're gonna tax an organization for existing, according to the assets within the organization's members?
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Merchandise, or at least the rights to all NFL licensed and endorsed merchandise, the broadcast rights of all NFL games and ancillary productions, the rights to use NFL teams, logos, etc. in video games? Basically they own the "NFL name"......which apparently is a multi-billion dollar industry in and of itself. :shrug:
 
WI Crippler said:
But they made money.......we have to get some of that away from them.
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Seems like taxation on association to me. A 'life tax' for organizations? Next we'll tax the NRA based on member assets, then churches. I'm afraid this goes deeper than mere cash grabbing and into the depths of social engineering.

Football bad, Obama phone good.

An organization sin tax.
 
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ecofarm said:
Seems like taxation on association to me. A 'life tax' for organizations? Next we'll tax the NRA based on member assets.
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If an organization profits from the sale of its name, merchandise, broadcasts, or service it provides/created (as in the case of video games)........I don't see how it could justify being exempt from taxation as an entity. :shrug:
 
FluffyNinja said:
If an organization profits from the sale of its name, merchandise, broadcasts, or service it provides/created (as in the case of video games)........I don't see how it could justify being exempt from taxation as an entity. :shrug:
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The NFL authorizes, but doesn't own. It's an organization of members with assets. Member's assets are taxed. The physical organization itself is taxed. You want to add an additional layer of taxation based merely on association. It's like taxing any other association based on member assets.

There's one other angle, taxing intellectual property rights.



But taxing based on "there's some money!" is ludicrous and does not constitute an argument.
 
The NFL gets by on this by applying the letter of the tax law. So, there's nothing illegal about what they're doing, obviously. But, what is the purpose of having a tax-exempt status, and does the NFL fit that intent? If not, then maybe the law should be tightened up a bit so that the NFL no longer qualifies. Of course, the NFL is such big business with such big influence in Congress that that is very unlikely to happen.
 
This isn't along the lines of the OP, but it shows how an NFL team can get a new stadium without paying for it. When I lived in Cincinnati, there was a big stink about the city getting stuck with the bill for the Paul Brown stadium. This bill got passed on to the tax payers. This is a perfect example of a team threatening to leave a city if the city doesn't pay for their new stadium.

The county says the final cost was $454 million. The team's estimate, which doesn't include infrastructure work around the stadium, puts the tab at $350 million.

But according to research by Judith Grant Long, a Harvard University professor who studies stadium finance, the cost to the public was closer to $555 million once other expenditures, such as special elevated parking structures, are factored in. No other NFL stadium had ever received that much public financing.
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A Stadium's Costly Legacy Throws Taxpayers for a Loss


As far as the NFL goes, they should not be allowed to be tax exempt. A GOP senator seems to agree with that idea too:

GOP Senator Slams Pro Sports Leagues For Using Non-Profit Status To Avoid Paying Taxes
 
ecofarm said:
Go buy nfl gear, game, etc and check the receipt.
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No, that is a local tax levied on the purchaser, not the NFL. Really?
 
WHy arent Religions taxed?
 
ecofarm said:
But taxing based on "there's some money!" is ludicrous and does not constitute an argument.
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But profiting based on "there's some money!" is ludicrous and does not constitute an argument.


(I bet ecofarm morally panics into a sweat of hypocrisy over this simple artefact of the Principle of Universality)
 
Slippery slope.

High Schools sell merchandise for profit all the time for team funding.
Little leagues do the same thing.
Pee wee football, t-ball etc are almost all funded by selling various things: tickets to games, bakesales etc etc.

Oh, dont forget the Boy Scouts and Girl Scouts.

We open that door and we will have a harder time shutting it, imo.
 
OpportunityCost said:
Slippery slope.

High Schools sell merchandise for profit all the time for team funding.
Little leagues do the same thing.
Pee wee football, t-ball etc are almost all funded by selling various things: tickets to games, bakesales etc etc.

Oh, dont forget the Boy Scouts and Girl Scouts.

We open that door and we will have a harder time shutting it, imo.
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That would be a closet door for the Boy Scouts....
 
Klown said:
But profiting based on "there's some money!" is ludicrous and does not constitute an argument.


(I bet ecofarm morally panics into a sweat of hypocrisy over this simple artefact of the Principle of Universality)
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Both of those statements are moronic.
 
ecofarm said:
What does the organization itself really own? Team owners, coaches, players, fans all pay tax. You're gonna tax an organization for existing, according to the assets within the organization's members?
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Why would it have to own anything? If nothing else it is a business that provides a service, which is normally taxable.
 
radcen said:
Why would it have to own anything? If nothing else it is a business that provides a service, which is normally taxable.
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It is an association. Members own and sell, the NFL merely administers and regulates their organization. All of the NFL's employees and transactions are taxed. What is not taxed is money that comes from team owners to facilitate said administration and regulation. That money was already taxed when it was received by the team owner, generally a few times. And it will be taxed again when used by the NFL for said operations.

The NFL does not generate $9b for itself, that goes to the owners. The NFL receives ~178m from owners for NFL association operations. That's about 1.5% of the cash generated by owners. We really need to tax the 178m, which has already been taxed and will be again when used, just because it is used for association purposes?


Should the NRA be taxed based on member assets and profits?
 
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ecofarm said:
What does the organization itself really own? Team owners, coaches, players, fans all pay tax. You're gonna tax an organization for existing, according to the assets within the organization's members?
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Sounds like property tax.
 
A non-critical non-charity for-profit (in reality) business organization that makes a butt load of money, pays no income tax on it, AND begs (and gets) for free (and/or heavily subsidized) business facilities (read: stadiums). What a gig!

The league and the teams might be separate legal entities, but that's more of a paper distinction as they intertwine and depend on each other. A league without teams would not work, and a team without a league would have nowhere near the same level of success. Even the best and most successful independent teams throughout sports history eventually fade and fail.
 
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