General Discussion
Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsEnd NFL's Tax Free status? Why is the NFL tax free?
http://www.credomobilize.com/petitions/end-the-nfl-s-charity-tax-breakhlthe2b
(101,715 posts)and schmooze (reliving their high school "glory" ...
RKP5637
(67,032 posts)big high school, well, except for those in congress still stuck in grade school.
theHandpuppet
(19,964 posts)Glad you bring the topic up.
http://www.democraticunderground.com/10023449838
RKP5637
(67,032 posts)little later. The other one that gets to me are these mega-churches, huge religious organizations/corporations with tax free status, and those taking political stances, politicking from the pulpit. And they seem to get a free pass, because they use the god word.
I've worked my ass off and have to pay taxes for everything I do. I don't get it as to why so many Americans choose to be blinded by these shysters and charlatans taking them for a ride with legalized tax evasion.
Igel
(35,191 posts)Partisanship, that's not okay.
Support a candidate and you can lose your 501(c)(3) status. Oppose a politician, that's another thing. Makes some political views dicey just about now, since some politicians that a non-profit may take issue with are very likely on the cusp of being candidates.
And it goes for any 501(c)(3), not just religious ones. And not just those liking (R).
CurtEastPoint
(18,549 posts)Congress being self-serving. What a shocker, right?
RKP5637
(67,032 posts)just quit and went home.
CurtEastPoint
(18,549 posts)Has it failed? Has capitalism won?
theHandpuppet
(19,964 posts)Like Seattle star cornerback Richard Sherman recently told Skip Bayless, Seahawks owner Paul Allen once again can declare to his NFL colleagues, Im better at life than you.
Forbes has issued its annual list of worldwide billionaires. Not surprisingly, more than a few of them own NFL teams. The richest of all NFL owners, via SportsBusiness Daily, is Allen, at a whopping $15 billion
I think you have your answer.
pipi_k
(21,020 posts)Also tax exempt:
National Hockey League
Pro Golfers Association
Ladies Professional Golf Association
librechik
(30,663 posts)and we don't tax the stadiums. I mean churches.
Progressive dog
(6,861 posts)countmyvote4real
(4,023 posts)That's what I was going to reply, but you beat me to it.
beachbum bob
(10,437 posts)wonderful aint it
Doctor_J
(36,392 posts)Just like being anti-war makes me a Paulite
PeaceNikki
(27,985 posts)http://www.irs.gov/Businesses/...
In regular corporate taxes, the company has top line revenue, expenses (including salaries on which the receiving individuals pay income tax), and whatever is left over after deductions is taxed at 35%. The remainder can be distributed to shareholders in the form of dividends (which is taxed again at 20% to the individual) or kept as retained capital to be used for another day. However, at an S Corp, all the profits are only taxed when they are distributed. So instead of paying the 35% rate, the shareholders can simply pay their own personal income tax rate.
The NFL league office receives NFL dues from the teams to cover the costs of Goodells salary, officials, league lawyers, accountants, etc. Out of $9.5 billion, about half of that goes out in player salaries, after distributions to the owners the league office receives about $225 million (2.7%) and has a total profit of $77.6 million. At the 35% corporate tax rate, that is about $27 million in taxes potentially owed. Its not zero, but it orders of magnitude below what the article implies. As mentioned before, the league can avoid paying any taxes at all by simply increasing expenses or reducing the fee NFL owners pay into the league office. So despite what the public might want, removing the non-profit status isnt likely to generate any additional revenue for Uncle Sam.
Roger Goodell pays income taxes. All the players and coaches pay income taxes. All the owners pay federal income taxes.
In conclusion: yes, the league office based in NYC could pay $27 million in taxes more, or the league could change to an S Corporation and pay no taxes. Certainly, each teams influence over local communities and politicians to use public funds for the benefit of private individuals could be addressed. In my opinion, that is the fault of politicians, not NFL owners seeking to maximize their own return.
Other notes: the NCAA is also a non-profit organization, including each individual athletic department.
genxlib
(5,506 posts)This response is a little misleading if not disingenuous.
Yes they could be an S-corp and not have any tax charges to the parent organization. However, all those "profits" would show up on the individual members of the S-corp partnership and they would have to pay taxes on that income.
Either way, the 77.6 million becomes taxable.
I was in an S-corp for years and I paid lots of taxes that kind of income over and above the salary.
Likewise, if they simply reduced the dues to avoid a profit, then the extra revenue would stay with the individual teams which would then be taxed.
The only somewhat valid point here is that it is not alot of money. Bit it is a matter of fairness more than actual economics.
SoapBox
(18,791 posts)But I say...get rid of that "special privilege" exemption.
jwirr
(39,215 posts)Jesus Malverde
(10,274 posts)Fred Sanders
(23,946 posts)PeoViejo
(2,178 posts)It makes it a lot easier to get people into a War mindset when their brains are addled by team sports and tribal mentality.
awoke_in_2003
(34,582 posts)DrewFlorida
(1,096 posts)I believe the NFL as it exists is a management entity for the 32 profit earning teams. The NFL itself does not earn profit, as all revenue taken in is the property of the 32 teams and whatever monies are left in the NFL coffers after expenses for league operations would then be equally dispersed among the teams, thereby showing up as net revenue (after operations expenses) for each team. This type of non-profit is not uncommon, we see other examples of it with condo coops and various associations.
I'm as vigorous as anyone at expecting the wealthy profit makers to pay their fair share, and it may be that individual NFL teams are cheating the system through tax payer subsidized stadiums and other various nefarious means. However I believe the tax free status for the NFL management entity is legitimate and should not be an issue.
immoderate
(20,885 posts)We should be looking more at groups like ALEC and AEI.
--imm
Vashta Nerada
(3,922 posts)KauaiK
(544 posts)I was shocked. The tax exempt status for religious organizations that politically active should also be terminated! Why should groups like Pat Robertson's (who uses donations for private jets to visit his diamond mines in Africa) and the Mormon Church (which actively discriminates) be exempt from taxes???
Igel
(35,191 posts)It's long on emotion, but rather short on valid facts, and even shorter on facts that have enough context to not be construed in a false manner.
Let's start with a definition--usually a good place to start, even if the OP is a bit short on them.
A 501(c)(6) not-for-profit is one of " 6)Business leagues, chambers of commerce, real-estate boards, boards of trade, or professional football leagues (whether or not administering a pension fund for football players), not organized for profit and no part of the net earnings of which inures to the benefit of any private shareholder or individual." While HOAs fall under this, let's not let that color our understanding of the law.
Notice: No part of the net earnings inures to the benefit of any private shareholder or individual. So if the NFL takes in billions in revenue--something like $9.5 billion in 2012--what happens to it all? First let's work on more definitions.
When we say "NFL" we sometimes mean teams. There are 35 of them. They are independent corporations, for profit, but are members of the NFL. We don't include our income as Democratic Party revenues, even if we're all members. So first we have to separate out the NFL from its members. The OP doesn't. When he pays for a ticket to watch a game, he's paying the NFL.
When we say "NFL" we sometimes mean the organization that licenses merchandise and negotiates broadcast deals. But that's a separate, for-profit corporation called NFL Ventures. The OP seems not to know this. When he buys a sweatshirt, he's paying a non-profit.
Both of the sets of for-profit companies do pay to the non-profit NFL. That reduces their tax burden. However, they're still all for-profit. Contributions from NFL Ventures and franchise fees (or "contributions" net the NFL $9.5 billion or more per year. And reduce the taxes paid by those for-profits. (However, all that money flows from pot to pot, and where it lands is nearly always a 'for profit' pot--so it's just a question of which pot is responsible for paying, not whether taxes are paid.)
So the non-profit NFL has three options for what it can do with that money: It can pay salaries and expenses (and does), it can distribute the money to its membership (which is a licit activity: the organization is formed for the members, after all), or it can retain the money. If it retains the money for a decade or two it would quickly have enough money to buy a smallish country, but it doesn't retain the money. Most of the money goes to its members. When the members receive it, it's immediately income and they have to pay taxes on it. That includes merchandise fees funneled through the NFL non-profit; it includes revenue-sharing by large, profitable franchises to help smaller franchises.
Meaning that most of the NFL's money is taxed. If not when held by NFL Ventures, if not when held by the Dodgers, then when it gets to the teams that receive it. Just that portion retained by the NFL non-profit--a bit less than 1% of the total--isn't taxed.
A lot of that money is paid in salaries. Which are taxed as any other salary--and are tax deductible, as any other business expense would be. A for-profit may have to find ways to make it a business expense, but they manage even as politicians write and re-write the tax laws to maximize government income and control corporate behavior.
It gets harder and harder to find that "share" of the taxes on the revenue that the OP claims to be paying. Although the way it works out, perhaps that writer really is paying the NFL's full share. Personally.
Why? Become some of the cash is still retained. Most organizations tend to have some money set aside to manage cash flow or respond to emergencies. If it was going to pay tax on that, it would just let more of that money pass through so that by the end of the fiscal year it would have almost no revenue that could be taxed. If it didn't, you'd find a lot of franchises paying a lot more in taxes--meaning it would cost more or fans wouldn't see the games. For those who don't like sports, that's a nice way of managing society to their liking. They have their values and want to impose them.
In this it is exactly like my HOA, which collects money annually and retains a portion to cover emergencies and expenses in case of a reduction in income. And it's exactly like the non-profit that was my student store. It had several divisions. One division paid taxes: It was a store, and if you bought a book or a sweatshirt or a computer or a pencil you'd pay sales tax and even merchandising fees, and net income on the sales was usually taxable. Another branch was the core purpose of the organization: To provide services to the student body that otherwise weren't offered. You buy a cup of coffee at the coffeehouse as a faculty member, you paid sales tax and the organization paid state/federal taxes on the income; if you bought it as a student, you didn't pay tax, because that revenue was tax free. You may pay sales tax on the textbook, but the organization paid no income taxes on that revenue and that lowered the price of the textbook by a trivial amount. Still, the student store had "retained contributions" in order to tide it over tough times or handle emergencies.
Warpy
(110,908 posts)but there was no reason for the NFL to be tax free anywhere else. I can only assume some sort of sweetheart deal with some powerful Congressman who thought all that football macho would rub off on him.
Sweetheart deals are all over the tax code and they've all been added since 1983.
It's infuriating, to say the very least.