NFL to Lose Tax Exempt Status?
The NFL is the nation’s largest sports franchise, generating nearly $10 billion per year. What most people don’t know is that it’s also a nonprofit organization. Even at that level of income, the NFL is a 501(c)(6) “business league” organization where the vast majority of its earnings trickle down to its 32 teams, which includes the Washington Redskins.
Recently, Eleanor Holmes Norton, Washington DC’s non-voting congressional delegate, introduced a bill in the House of Representatives to strip the NFL of its tax-exempt status because it promotes a “racial slur for profitable gain.” Meanwhile, a companion bill to accomplish the same thing has been submitted in the Senate (S.2884) by Maria Cantwell (D-WA). While many appeals made directly to the team over the last several years have failed to yield a name change, supporters of the cause are now taking aim directly at the NFL itself. Back in June, opponents of the team’s name took their battle to the United States Patent and Trademark Office, where the name Redskins lost its trademark protection after it was found to be disparaging to Native Americans (Blackhorse v. Pro Football, Inc.).
After all the years of pleading, threats, and ultimatums for one team to change its name, the debate may end up being completely inconsequential when it comes to the NFL keeping its nonprofit status. In early 2014, Representative Jason Chaffetz, (R-UT) introduced a bill that would strip the NFL of its tax-exempt status, and the Washington Redskins had nothing to do with it. Chaffetz said, “In reality, the NFL and the NHL are for-profit businesses, and they should be taxed as such. They are not charities nor are they traditional trade organizations like local chambers of commerce.”
In fact, the naming controversy in the NFL just may end up being the tipping point that causes other national sports “nonprofit” organizations to lose their status as well. Back in 2013, some senators were talking about eliminating the nonprofit status not only of the NFL, but the NHL and PGA, too. To find out how it’s all playing out, visit Don’t Mess with Taxes.
