That tax exemption over which the IRS is hassling the Tea Party? The NFL has exploited it for years
Yet there is no IRS hassle or runaround for the most profitable sports league in America, the National Football League. The NFL rakes in about $10 billion a year, yet the league pays no income taxes whatsoever -- because they are technically classified as a "non-profit".
I think I just offshore tax sheltered in my mouth a little bit.
Quietly, the NFL has operated as a non-profit since 1966, back before the NFL became more profitable than a mid-size oil producing nation. The issue bubbled up last week when Sen. Tom Coburn (R-OK) introduced an amendment to end sports leagues' ability to operate as non-profits, as part of a larger bill called the Marketplace Fairness Act. (Which is supposed to be about Internet sales tax. This is how laws get made, I guess?)
You see, the NFL operates as a 501(c)(6) nonprofit, which renders them exempt from paying federal income taxes. (The Tea Party groups were applying to become 501(c)(4) nonprofits.) Individual NFL teams operate as for-profit entities, but the league itself is classified as a nonprofit.
"Taxpayers may be losing at least $91 million subsidizing these tax loopholes for professional sports leagues that generate billions of dollars annually in profits," Senator Coburn's office said in a release.
There has been some backlash that Sen. Coburn's efforts are part a Republican conspiracy to punish NFL owners for supporting Democrats. "Maybe it’s that NFL Owners haven’t contributed to the GOP anywhere near as much as one would think," says a Football Reporters Online post. "The Dolphins billionaire owner Stephen Ross’ political donations have gone overwhelmingly to Democratic Candidates. Dallas Cowboys Owner Jerry Jones has given far more to independents than to Republicans."
This argument has as much credibility as me that one time I claimed I was banging Manti Te'o's girlfriend.
The Center for Responsive Politics found that NFL owners are far more supportive of conservative causes. The top three donating owners (Bob McNair, Woody Johnson, Alex Spanos) have donated almost exclusively to Republicans. "Overwhelmingly Democratic" Miami Dolphins owner Stephen Ross threw fundraisers for Mitt Romney during the elections.
Personally, I think the only organizations that ought to be tax-exempt are charities and religions. I don't see why sports leagues get this privilege -- but I have to concede that it's the law. It may be an unfair law, but you can rest assured that the NFL has the sharpest attorneys on speed dial to make sure that unfair law stays on the books.