The NFL gained tax-exempt status as a nonprofit in 1944. A designation in the tax code — 501(c)(6) — enables the league to function like a trade organization. The league office is not required to pay taxes but individual teams are.
Roger Goodell makes 44 mln a year . There is no way the NFL should have a non profit status. Coakley should be a leader and sue the NFL for the portion of taxes due to Mass.
Please share widely!
Aren’t you supposed to show some sort of charitable benefit to the community for that status? Plus, in most markets the NFL is also a monopoly which seems all the more reason to keep close tabs on it. Is it in fact possible for a state to deny that status for DOR purposes even if the IRS allows it? Also, what taxes would the NFL pay to the state that would not be connected to the New England Patriots which the diary indicates do already pay taxes?
as I understand it , IRS taxes athletes and performers base on their % of earnings in a state. So Brady plays in NJ two times a season in 16 game season that is 12% ( or less) .
NFL has 32 teams, one in Mass and hence some portion of NFL’s revenues are attributable to Mass
…that a portion of the revenue from Patriots ticket and merchandise sales go to the league rather than the team? Pardon the ignorance, but this is about as far from my area of interest or expertise as one can get.
The NFL was given an antitrust exemption, not against competing leagues (which have popped up from time to time) but allowing the league to negotiate hugely lucrative TV contracts with the networks. That money, about $6 billion in recent years, is distributed to the teams equally to promote parity. Same with merchandise sales. About a third of ticket proceeds go to the visiting team, so everyone gets some of that too.
Teams keep their luxury box money and income from crappy $6 hot dogs and other concessions.
States tax athletes based on number of days spent in the state out of a predetermined “length of season” of about 200 days for NFL players. Brady would be taxed only for the Saturday and Sunday spent in NJ when the Patriots to to visit the Jets. The other 5 days of that week he’s taxed in Mass.
Are you suggesting that non-profit organizations have some kind of salary cap such that, if they’re going to pay an employee above that cap, they must be classified as profit making? Is that the law?
I didn’t think it was, but I don’t get the argument.
Surely there are many things both outrageous and legal. A $44,000,000 salary to a non-profit employee doesn’t sound as if it’s the even most outrageous but legal thing in this world.
…but a $44M salary sounds like at least $43M that’s not going back into programs that benefit the community, which is what I thought non-profit status was for.
It’s a “civic” organization.
One might ask whether such organizations are needed, surely.
I agree the NFL shouldn’t be tax exempt but as they aren’t breaking the law, what is Coakley going to sue them for?
I know it may seem unpatriotic, but I just stopped watching football. It’s a horrible sport, I’ve discovered of late, and I simply want no part of it.
It is probably a silly policy to give tax-exempt status to organizations such as this, but removing that status probably wouldn’t make much of an actual difference in tax collections.
First, although the commissioner’s office is tax exempt, the teams are not. So once TV revenues are collected and split, they are taxed at the team level. The sponsorship and merchandise revenue, which shouldn’t be be tax exempt, amiright?– turns out to be… taxed. That is because those revenue streams go through a different entity that is jointly-owned by all the teams.
So the only thing that is tax exempt is the commissioner’s office, which does the scheduling, discipline, and rules, and collects and distributes the TV revenue. That means that, even if it weren’t taxed, its profits would be deliberately structured to be zero anyway– because everything is passsed onto the for-profit teams.
If it has no tax implications, then it’s all the more reason to not muddy the waters. MLB wen’t for-profit back in 2007 or so IIRC.
My bet is that there is some tax implication, but relative to total NFL taxes, isn’t a particularly big number.
Some have pointed out we wouldn’t know how much Goodell was paid if it wasn’t a non-profit since as a not for profit they were required to disclose their finances. The MLB no longer does, and it hasn’t significantly paid more taxes since the status change. From the Post article on this subject:
I’d still say taxing is worth the loss of disclosure, though we should look into closing more of these loopholes.
The individual teams are not non-profit. Just the league.
I’m not arguing that the NFL should be non-profit, I just want to remind folks that the teams themselves aren’t the issue, it’s the league itself.