NFL as a tax exempt entity

[Happy Panther]

This is a pretty good article on exactly how the NFL is classified

 

http://www.forbes.com/sites/peterjreilly/2013/06/01/nfl-as-tax-exempt-less-than-meets-the-eye/

 

 

Essentially 501©(6) organizations are not charities, because their members are trying to make money.  The members, though, are trying to make money for themselves.  They don’t really have an interest in having the 501©(6) make money.  That is why it is not-for profit even though it is not a charity.

 

So if you take away the NFL's tax exempt status you don't generate any taxes because the NFL takes a loss every year

 

 

The NFL had expenses in excess of revenue of $77,628,857 for the year ended 3/31/2012 and $52,195,407 for the prior year.  Apparently, that is nothing new.  The liabilities of the NFL exceeded its assets by $316,642,454  at 3/31/2012.  Superficially, my reasoning would be that if the NFL was organized as an LLC, instead of as an exempt organization, the member teams would have had nearly a third of a billion more in deductions since inception.  I’m sure it is more complicated than that, but I suspect that the motivation for the way it operaties may be to keep liabilities off the balance sheets of the member organizations.  It appears to me that if there is a game there, it is a GAAP (generally accepted accounting principles) game, not a tax game.

 

Superficially, it appears that, if the NFL were not an exempt organization, it would not owe federal income taxes, because it has not been making money.  If you view the NFL in conjunctions with its member teams, it appears that it has the effect of increasing aggregate taxable income.

 

 

If this is all true then why the hell are lawmakers so hellbent on changing the status?

 

[Gucci Mane]

maybe to force them to be fiscally responsible?

[Doc Holiday]

Any good business owner knows for tax reasons you either want to show your company either breaking even or taking a loss every year, if you make money and show that you do you have to pay taxes on it and the US has among the highest coprate tax rates in the world so go figure they try not to pay.

[Happy Panther]

maybe to force them to be fiscally responsible?

 

How is the NFL fiscally irresponsible?

[Happy Panther]

 US has among the highest coprate tax rates in the world so go figure they try not to pay.

 

Only on a statutory basis. The effective tax rate is actually very low.

 

http://thinkprogress.org/economy/2012/03/30/456005/reminder-corporate-taxes-very-low/

 

[Gucci Mane]

How is the NFL fiscally irresponsible?

 

i didnt say they were or weren't im just speaking from the mind of a politician.[i used bad wording i know, devils advocate]

 

from my understanding, NFL teams combine revenue and distribute it, much in a socialism fashion.

 

Kinda like the NBA floats the WNBA while the WNBA loses money year after year.

[Gucci Mane]

Only on a statutory basis. The effective tax rate is actually very low.

 

http://thinkprogress.org/economy/2012/03/30/456005/reminder-corporate-taxes-very-low/

 

 

This is because a lot of companies keep a lot of money offshores [like apple] so to repatriate at 35% would be stupid for companies to do.

[L-TownCat]

The fact that its even a discussion whether or not its right or wrong for a sports organization to pay taxes speaks volumes about how screwed up the system is.  Our tax code is over 76,000 pages long.  That makes a new york city phone book look like a Readers Digest.

[KillerKat]

I don't know what's going on in here!

[Doc Holiday]

The fact that its even a discussion whether or not its right or wrong for a sports organization to pay taxes speaks volumes about how screwed up the system is.  Our tax code is over 76,000 pages long.  That makes a new york city phone book look like a Readers Digest.

it's about economic impact, when apple sales products the only people making money is apple. when the NFL has a game, there are 70+thousand people showing up to games, and spend money on travel, food, merch ect.. and for fans of the away team, it drives up restaurant revenue in those cities, not to mention a great deal of the revenue generated by the franchises are paid to their players who while making millions are taxed at very high rates and pay millions in taxes, the NFL is a money making machine, if the NFL were to pull out of a city, the lost tax revenue might get close to $100m a year to that city (well maybe not just the city because there is a fair amount that goes to the feds but you get the point).

 

that why when the Panthers were asking for $200 million for upgrades I was saying all they were really asking for was the equivalent of a 2 year tax break from the city and state government.

 

it's called market size and market impact, if people actually knew how some of this stuff actually worked it would be amazing

[L-TownCat]

it's about economic impact, when apple sales products the only people making money is apple. when the NFL has a game, there are 70+thousand people showing up to games, and spend money on travel, food, merch ect.. and for fans of the away team, it drives up restaurant revenue in those cities, not to mention a great deal of the revenue generated by the franchises are paid to their players who while making millions are taxed at very high rates and pay millions in taxes, the NFL is a money making machine, if the NFL were to pull out of a city, the lost tax revenue might get close to $100m a year to that city (well maybe not just the city because there is a fair amount that goes to the feds but you get the point).

that why when the Panthers were asking for $200 million for upgrades I was saying all they were really asking for was the equivalent of a 2 year tax break from the city and state government.

it's called market size and market impact, if people actually knew how some of this stuff actually worked it would be amazing

You may have misinterpreted my post a bit. I get all that and I too was one of the few that supported the team getting the money. The loss far outweighed any small increases that may incur. I was trying to say that people are discussing the wrong things nowadays. The tax status of the NFL should not be a focus of discussion.

[Udogg]

As a business owner I know that if I show a profit my accountant sucks.