National Football League says it will give up its tax-exempt status

Reuters News
Posted: Apr 28, 2015 1:47 PM

By Steve Ginsburg

WASHINGTON (Reuters) - The National Football League's front office will voluntarily give up its decades-old tax-exempt status, Commissioner Roger Goodell said on Tuesday.

NFL teams pay taxes on their profits but the league's central office has gotten a pass since it is listed a non-profit trade or industry association.

Commissioner Roger Goodell, in a memo to the NFL's 32 teams, said the league's tax status has been "mischaracterized repeatedly in recent years" and is a "distraction."

"The fact is that the business of the NFL has never been tax exempt," he said. "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 even when the league office and Management Council file returns as taxable entities, and the change in filing status will make no material difference to our business."

Section 501(c)(6) of the Internal Revenue Code lists "professional football leagues" as deserving of tax-exempt status, a vestige of legislative wrangling that helped the NFL and its upstart rival, the American Football League, merge in 1966.

Representative Jason Chaffetz, a Utah Republican who became chairman of the House Oversight Committee in January, had said he wanted Goodell to testify before Congress on why he thought the NFL front-office deserved tax-exempt status.

The Joint Committee on Taxation estimates the 10-year cost to the taxpayer of the NFL exemption is about $109 million.

(Reporting by Steve Ginsburg; Editing by Susan Heavey and Lisa Lambert)