January 29, 2014
WASHINGTON, D.C. – U.S. Senator Angus King (I-ME) today announced his support for the PRO Sports Act, sponsored by Senator Tom Coburn (R-OK), which would amend the tax code to prohibit professional sports organizations with annual revenues of more than $10 million from enjoying the same tax-exempt, 501(c)(6) status as industry trade associations and public interest groups.
“Most Americans would be shocked to learn of all the tax loopholes that companies and organizations are able to take advantage of to boost their bottom line and which end up costing taxpayers millions per year,” Senator King said. “Section 501(c)(6) of the tax code is intended to exempt organizations that exist to promote specific industries and professions, not league-specific brands. This is just a common-sense issue to me. I like the NFL, but I don’t think it’s unfair to ask their central office to pay its share in taxes.”
Currently, a number of professional sports leagues – like the National Football League (NFL), the National Hockey League (NHL), and the PGA tour, among many others – have central offices registered as 501(c)(6) tax-exempt organizations, which allows the opportunity for their revenue to be tax-free. Leagues qualify for the tax-exempt status by stating their purpose is to help promote their respective sports and membership instead of themselves, but these leagues are clearly organized for profit to promote their specific brands – and it costs taxpayers millions of dollars every year. The Joint Committee on Taxation estimates that closing the loophole would save U.S. taxpayers approximately $109 million over ten years.
For additional information on the PRO Sports Act, click here.