NFL Drops Tax-Exempt Status

In Tax News by Daniel Friedel

goodell-3This week, in a statement to Congress and team owners, NFL commissioner Roger Goodell announced that the National Football League will voluntarily give up its federal tax-exemption status.

Since the announcement, two questions remain: (1) who volunteers to start paying federal income taxes? and (2) the NFL had a pass from paying taxes, seriously?!

Whats the Play?

In light of the recent bad PR some giant U.S. corporations received for not paying any income taxes and moving their HQ out of the USA, this move by the NFL, to voluntarily start chipping in its “fair share” of taxes, might just be the fresh breeze of patriotism the NFL needs right now.   After all, whats more American than football and taxes?

According to NFL Commissioner Goodell (paid $35 million in 2013), the tax-exempt status was a “distraction” that has “been mischaracterized repeatedly in recent years.” Goodell and the NFL have been under fire recently for issues ranging from the handling of player’s domestic violence, to downplaying the effects of concussions, all the way to social questions of the value of certain west coast teams name.

Unfortunately (for us), by giving up the tax exempt status, the NFL will no longer be required to reveal just how much the top brass at HQ is getting paid- along with other financial data.  This is likely the main motivation behind the NFL’s decision.

Estimated Tax Liability

In the end, the NFL will only pay about $10 – $15 million dollars annually to the IRS once it’s tax-exempt status is dropped.  This is a drop in the bucket for the NFL, considering that Commissioner Goodell took home $140 million dollars in the six seasons ending in 2013, more than any other player in the same period.