Republican targets NFL tax exemption

Rep. Jason Chaffetz (R-Utah) is taking another shot at ending the tax exemption for professional sports leagues.

{mosads}Just days ahead of the Super Bowl, Chaffetz introduced legislation on Tuesday that would strip both the National Football League and the National Hockey League of their tax-exempt status. 

“Professional sports organizations aren’t fooling anybody. Organizations like the NFL and NHL are for-profit businesses making millions of dollars each year. These are not charities nor are they traditional trade organizations. They are for-profit businesses and should be taxed as such,” said Chaffetz. “Closing this loophole should be combined with closing several other loopholes in order to lower tax rates in a revenue-neutral manner.”

Chaffetz, a former kicker at Brigham Young University, made a similar attempt a year ago. Former Sen. Tom Coburn (R-Okla.), who retired at the end of last year, was the driving force for the proposal on the other side of the Capitol.

Under the current set-up, the NFL and NHL are organized as trade associations — akin to the U.S. Chamber of Commerce — in the tax code. Major League Baseball and the National Basketball Association don’t have tax exemptions.

For the NFL and NHL, that means the league offices are tax-exempt, but not the teams themselves and ticket and jersey sales — a point that league officials defending the exemption have been quick to make. 

Even so, the Joint Committee on Taxation said last year that repealing the exemption would raise about $109 million in revenue over a decade. Critics of the leagues’ tax status also insist that leagues that can pay officials like NFL commissioner Roger Goodell tens of millions of dollars a year don’t need the exemption.

Former House Ways and Means Chairman Dave Camp (R-Mich.) proposed rolling back the exemption in his tax reform plan last year.