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NFL drops its tax-exempt status

NFL commissioner Roger Goodell admits to a rough year. (Associated Press)
NFL commissioner Roger Goodell admits to a rough year. (Associated Press)
By Stephen Ohlemacher Associated Press
WASHINGTON (AP) — The National Football League is giving up its tax-exempt status, which Commissioner Roger Goodell called a “distraction.” In a letter to team owners, Goodell said that the league office and its management council will file tax returns as taxable entities for the 2015 fiscal year. Goodell said the NFL has been tax-exempt since 1942, though all 32 teams pay taxes on their income. Goodell said the change will not alter the function or operation of the league, since all the teams already pay taxes. “As you know, the effects of the tax-exempt status of the league office have been mischaracterized repeatedly in recent years,” Goodell said in the letter, dated Tuesday. “The fact is that the business of the NFL has never been tax exempt.” Major League Baseball gave up its 501(c)(6) tax-exempt status in 2007, which eliminates the requirement for an annual filing of IRS Form 990, which is the publicly available tax return of a tax-exempt organization and requires the listing of compensation for the highest-paid employees. The National Hockey League also has tax-exempt status, but the National Basketball Association does not. Some members of Congress have criticized the NFL, which generates billions in revenue, for being tax-exempt. One of those is Washington Sen. Maria Cantwell, who introduced legislation last year that would have tied the NFL’s tax-exempt status to doing away with the Washington D.C. team’s name, the Redskins. In a statement today, Cantwell said, “Today’s announcement by the National Football League is a victory for taxpayers, and a long overdue step forward for the nation’s largest sports league, with estimated tax breaks worth more than $100 million. However, giving up a tax break on $9.5 billion in revenue doesn’t mean you can ignore the need for the NFL to abandon a racial slur as a team name. The U.S. Patent Office has ruled it is a slur and not patentable. The NFL should follow suit.” Robert McNair, owner of the Houston Texans and chairman of the league’s finance committee, said, “The owners have decided to eliminate the distraction associated with misunderstanding of the league office’s status, so the league office will in the future file returns as a taxable entity.” Team owners gave the league’s finance committee and management council the authority to change the tax status at league meetings in March, Goodell said. “As a result, the committees decided to eliminate this distraction,” Goodell wrote. Goodell forwarded the owners letter to Reps. Paul Ryan, R-Wis., and Sander Levin, D-Mich. Ryan chairs the tax-writing House Ways and Means Committee and Levin is the ranking Democrat.
AP Sports Writers Ronald Blum and Howard Fendrich contributed to this report.
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