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January 31, 2014
Coburn Endorses Campaign Against NFL Tax Benefits
by Andy Sheets

Full Text Published by Tax Analysts®

Sen. Tom Coburn, R-Okla., has been joined in his efforts to end the tax exemption for professional sports leagues by a new grassroots campaign,

Speaking on a conference call January 30 to announce the campaign's debut and to promote legislation he introduced to revoke the exemption for sports leagues (S. 1524), Coburn said, "I love football, I love golf, but I love a fair tax code," and he encouraged listeners to embarrass lawmakers who do not sponsor the bill. Rep. Jason Chaffetz, R-Utah, introduced similar legislation (H.R. 3965) in the House on January 29.

NFL proponents and stakeholders emphasize that it is the league, not the individual franchises, that is exempt. NFL outside tax counsel Jeremy D. Spector of Covington & Burling LLP told National Public Radio for a January 18 story that the league's section 501(c)(6) tax exemption applies only to the NFL's administrative offices and Commissioner Roger Goodell's salary, not to individual teams or ticket sales, merchandise sales, television deals, or corporate sponsorships.

On the SackNFLTaxBreaks conference call, co-founder Ryan Rudominer called Coburn's bill a "no-brainer," and ESPN writer Gregg Easterbrook described the NFL's tax-exempt status as a "transparently wrong piece of public policy" with no arguments to justify it.

Call participants also placed the NFL's tax exemption within a broader context of government-provided tax benefits for business interests. SackNFLTaxBreaks advisory board member David Goodfriend said the NFL's exemption fits "a pattern of government subsidization that has run amok," and Easterbrook said that if lawmakers and the public "can't fix a transparently phony issue, which ones are we going to fix?"

Andrew Delaney of the National Sports and Entertainment Law Society said although many aspects of the NFL are taxed, its nonprofit arm resembles a tax shelter, and Goodell's $29.5 million salary greatly exceeds the salaries of most nonprofit CEOs.

SackNFLTaxBreaks' other co-founder, Lynda Woolard, previously began a petition ( calling for the revocation of the NFL's exemption, and the petition has more than 312,000 signers.

Survey results released January 24 by Fairleigh Dickinson University's PublicMind found that 71 percent of respondents oppose the use of tax benefits to attract NFL franchises or to keep a team in town, and 69 percent oppose the use of taxpayer money to build and maintain stadiums for NFL teams, while 69 percent incorrectly identified the league as a for-profit enterprise.

"The public's love for the game clearly doesn't trump their fiscal restraint," PublicMind Director Krista Jenkins said. "The public says taxpayers shouldn't be hit up for support when there's enough in the NFL coffers to pay their own way." Jenkins cited licensing and ticket sales that raise significant revenue.

"With billions likely to flow from the Super Bowl, it would seem a contradiction that the organization behind it all would be technically a not-for-profit, but that is indeed true about the NFL," she said.

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