# The NFL is Tax Exempt... WTF?! **URL:** \ **Category:** The Game Room\ **Created:** [May 22, 2013, 1:22pm UTC](https://boards.straightdope.com/t/the-nfl-is-tax-exempt-wtf/659011 "2013-05-22T13:22:32Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![chargerrich](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/chargerrich/32/5399_2.png) [@chargerrich](https://boards.straightdope.com/u/chargerrich)\ **Post date:** [May 22, 2013, 1:22pm UTC](https://boards.straightdope.com/t/the-nfl-is-tax-exempt-wtf/659011/1 "2013-05-22T13:22:32Z")
Seriously… huge fan of the NFL but I did not know until this [article](http://sports.yahoo.com/blogs/nfl-shutdown-corner/congress-may-review-nfl-tax-exempt-status-004521453.html)that the league - with 10 BILLION - in revenues annually pays ZERO taxes as a not for profit organization. So the brilliant minds in Washington find it necessary to drag Apple into court because they legally (but creatively) used every advantage and loop hole in our horrendous tax code while still paying an effective tax rate of 30.5%… but the National Football League as a 501c pays nothing? Someone tell me I am missing something important that makes this no where near as unbelievable (and confidence shattering) as it appears. How can our government be THAT incompetent? ---
**Author:** ![Amateur\_Barbarian](https://avatars.discourse-cdn.com/v4/letter/a/59ef9b/32.png) [@Amateur\_Barbarian](https://boards.straightdope.com/u/Amateur_Barbarian)\ **Post date:** [May 22, 2013, 1:28pm UTC](https://boards.straightdope.com/t/the-nfl-is-tax-exempt-wtf/659011/2 "2013-05-22T13:28:26Z")
The special treatment of sports in the US will never cease to amaze me. Here’s something I just (re)read in a Norman Corwin essay that I think most people overlook: every other form of entertainment has to pay da big bux for advertising and coverage, but sports gets 1/3 of all the news coverage, 24/7/365, for free. And then we hand them collective billions in funding, civic support, anti-trust exemptions… and no, I didn’t know about this tax exemption. Screw the whole lot of them. ---
**Author:** ![DCnDC](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dcndc/32/2842_2.png) [@DCnDC](https://boards.straightdope.com/u/DCnDC)\ **Post date:** [May 22, 2013, 1:44pm UTC](https://boards.straightdope.com/t/the-nfl-is-tax-exempt-wtf/659011/3 "2013-05-22T13:44:05Z")
While I agree that it’s outrageous that the NFL is considered a “non-profit organization,” let’s be clear here: **it’s the NFL that is the NPO** ; the individual teams are for-profit companies and taxed accordingly. ---
**Author:** ![chargerrich](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/chargerrich/32/5399_2.png) [@chargerrich](https://boards.straightdope.com/u/chargerrich)\ **Post date:** [May 22, 2013, 1:53pm UTC](https://boards.straightdope.com/t/the-nfl-is-tax-exempt-wtf/659011/4 "2013-05-22T13:53:16Z")
> [@DCnDC](#): > > While I agree that it’s outrageous that the NFL is considered a “non-profit organization,” let’s be clear here: **it’s the NFL that is the NPO** ; the individual teams are for-profit companies and taxed accordingly. Oh I understand the loophole and that does absolutely zero to change my thoughts on the subject. Yes the U.S. Tax Code is a joke The NFL manages to pay out lofty sums of money to executives and teams to ensure annually so that by the “letter of the law” the “entity” known as the NFL has no profit… but back in the real world we all know that saying the NFL has no profits is offensive to even the mildly intelligent. ---
**Author:** ![bump](https://avatars.discourse-cdn.com/v4/letter/b/7c8e57/32.png) [@bump](https://boards.straightdope.com/u/bump)\ **Post date:** [May 22, 2013, 1:59pm UTC](https://boards.straightdope.com/t/the-nfl-is-tax-exempt-wtf/659011/5 "2013-05-22T13:59:45Z")
It’s kind of similar to how you could say the GDP of the UN is some colossal number, but in reality, that’s the GDP of each member nation added together, not the actual revenue of the United Nations as an organization, which is much, much smaller. ---
**Author:** ![bump](https://avatars.discourse-cdn.com/v4/letter/b/7c8e57/32.png) [@bump](https://boards.straightdope.com/u/bump)\ **Post date:** [May 22, 2013, 2:05pm UTC](https://boards.straightdope.com/t/the-nfl-is-tax-exempt-wtf/659011/6 "2013-05-22T14:05:13Z")
> [@chargerrich](#): > > Oh I understand the loophole and that does absolutely zero to change my thoughts on the subject. > > Yes the U.S. Tax Code is a joke > > The NFL manages to pay out lofty sums of money to executives and teams to ensure annually so that by the “letter of the law” the “entity” known as the NFL has no profit… but back in the real world we all know that saying the NFL has no profits is offensive to even the mildly intelligent. The NFL as an organization actually only had cash flows in the ballpark of 50 million bucks in 2010 or so, and it looks like they’re funded by the member clubs, so your outrage is kind of ill-informed. [http://deadspin.com/5819427/exclusive-weve-obtained-audited-financials-for-the-nfl-league-office](http://deadspin.com/5819427/exclusive-weve-obtained-audited-financials-for-the-nfl-league-office) ---
**Author:** ![Dewey\_Finn](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dewey_finn/32/4222_2.png) [@Dewey\_Finn](https://boards.straightdope.com/u/Dewey_Finn)\ **Post date:** [May 22, 2013, 2:08pm UTC](https://boards.straightdope.com/t/the-nfl-is-tax-exempt-wtf/659011/7 "2013-05-22T14:08:23Z")
You think that’s bad? [In 2010, General Electric had total worldwide profits of $14.2 billion ($5.1 billion in the US) and paid no taxes.](http://www.nytimes.com/2011/03/25/business/economy/25tax.html) Meanwhile, as an apartment renter with only salary and some investment income, I get virtually no tax breaks. ---
**Author:** ![newcomer](https://avatars.discourse-cdn.com/v4/letter/n/e5b9ba/32.png) [@newcomer](https://boards.straightdope.com/u/newcomer)\ **Post date:** [May 22, 2013, 2:12pm UTC](https://boards.straightdope.com/t/the-nfl-is-tax-exempt-wtf/659011/8 "2013-05-22T14:12:32Z")
Taxes are not paid on revenue but on profit. If they are setup and abide by non-profit rules then what to pay taxes on? I’m sure there are many NFL affiliated or derived businesses that are not non-profit and those do pay taxes. ---
**Author:** ![Munch](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/munch/32/5281_2.png) [@Munch](https://boards.straightdope.com/u/Munch)\ **Post date:** [May 22, 2013, 2:44pm UTC](https://boards.straightdope.com/t/the-nfl-is-tax-exempt-wtf/659011/9 "2013-05-22T14:44:10Z")
> [@chargerrich](#): > > The NFL manages to pay out lofty sums of money to executives and teams to ensure annually so that by the “letter of the law” the “entity” known as the NFL has no profit… but back in the real world we all know that saying the NFL has no profits is offensive to even the mildly intelligent. Both you and the author of the article you posted don’t understand what non-profit status means. Plenty of non-profit organizations make a profit. In fact, most of them do - they’d have to be shut down if they didn’t. ---
**Author:** ![Amateur\_Barbarian](https://avatars.discourse-cdn.com/v4/letter/a/59ef9b/32.png) [@Amateur\_Barbarian](https://boards.straightdope.com/u/Amateur_Barbarian)\ **Post date:** [May 22, 2013, 3:01pm UTC](https://boards.straightdope.com/t/the-nfl-is-tax-exempt-wtf/659011/10 "2013-05-22T15:01:26Z")
> [@bump](#): > > The NFL as an organization actually only had cash flows in the ballpark of 50 million bucks in 2010 or so, and it looks like they’re funded by the member clubs, so your outrage is kind of ill-informed. Why should the “holding company” be itself exempt, regardless of the tax status of the “held companies”? If it’s an entirely passthrough/summary entity, their tax burden will be negligible. If they run $50 million in costs through it, the net should be taxable. I don’t think there’s anything ill-informed about that, and I’ll stand behind my first comments at being sick of the tax and public funding costs of pro sports that generate hundreds of billions in revenue for themselves while holding host cities and states hostage for as much as they can. ---
**Author:** ![bump](https://avatars.discourse-cdn.com/v4/letter/b/7c8e57/32.png) [@bump](https://boards.straightdope.com/u/bump)\ **Post date:** [May 22, 2013, 3:18pm UTC](https://boards.straightdope.com/t/the-nfl-is-tax-exempt-wtf/659011/11 "2013-05-22T15:18:13Z")
> [@Amateur\_Barbarian](#): > > Why should the “holding company” be itself exempt, regardless of the tax status of the “held companies”? If it’s an entirely passthrough/summary entity, their tax burden will be negligible. If they run $50 million in costs through it, the net should be taxable. > > I don’t think there’s anything ill-informed about that, and I’ll stand behind my first comments at being sick of the tax and public funding costs of pro sports that generate hundreds of billions in revenue for themselves while holding host cities and states hostage for as much as they can. I’m certain that they meet whatever the legal criteria are for a non-profit, to suggest otherwise is silly. You just seem pissed that somehow because of the scale and the nature of the enterprise, there must be taxes to be had, because it’s not fair somehow. That’s also silly. Taxes aren’t generally on revenue as far as companies are concerned- only on that part that isn’t “deductible” just like our taxes. For a person, things like health insurance, college tuition, dependents, etc…are all deductible, and reduce the total amount that our taxes are based on. For companies, things like payroll, etc… are “deductible”, such that they’re basically only taxed on profits. A non-profit, by definition, isn’t in the business of maximizing profits- any profit that is generated is usually refunded or somehow not distributed as a dividend or increase in stock price (are there even shares?). ---
**Author:** ![Amateur\_Barbarian](https://avatars.discourse-cdn.com/v4/letter/a/59ef9b/32.png) [@Amateur\_Barbarian](https://boards.straightdope.com/u/Amateur_Barbarian)\ **Post date:** [May 22, 2013, 3:29pm UTC](https://boards.straightdope.com/t/the-nfl-is-tax-exempt-wtf/659011/12 "2013-05-22T15:29:16Z")
Thanks, bump, I’ve run non-profits and know their purpose. I also understand the difference between nonprofit and not-for-profit organizations. This entire operation is a for-profit one with no justification for non- or not-for- status. Yes, I am pissed that they are allowed this exception because of the privileged position of pro sports in this country. Point to another such example of a 100% profit-oriented industry allowed an NP/NFP status for their controlling organization or holding company. I’ll wait. ---
**Author:** ![Munch](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/munch/32/5281_2.png) [@Munch](https://boards.straightdope.com/u/Munch)\ **Post date:** [May 22, 2013, 3:34pm UTC](https://boards.straightdope.com/t/the-nfl-is-tax-exempt-wtf/659011/13 "2013-05-22T15:34:16Z")
> [@bump](#): > > A non-profit, by definition, isn’t in the business of maximizing profits- any profit that is generated is usually refunded or somehow not distributed as a dividend or increase in stock price (are there even shares?). That’s essentially right - but non-profits do not have shareholders by law, so there wouldn’t be any dividends or stock prices. Revenue generated needs to go back into the organization itself, or be redistributed to other similarly missioned organizations. If there were considerable amounts of revenue, they could form a foundation, where they would be required to spend 5% of its assets each year and let the rest accrue in an invested endowment. ---
**Author:** ![Cheesesteak](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cheesesteak/32/3694_2.png) [@Cheesesteak](https://boards.straightdope.com/u/Cheesesteak)\ **Post date:** [May 22, 2013, 3:34pm UTC](https://boards.straightdope.com/t/the-nfl-is-tax-exempt-wtf/659011/14 "2013-05-22T15:34:17Z")
> [@Amateur\_Barbarian](#): > > Point to another such example of a 100% profit-oriented industry allowed an NP/NFP status for their controlling organization or holding company. I’ll wait. [Here you go.](http://www.deseretnews.com/article/865564748/The-NFL-NHL-PGA-are-all-nonprofit-tax-exempt-organizations.html?pg=all) ---
**Author:** ![Munch](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/munch/32/5281_2.png) [@Munch](https://boards.straightdope.com/u/Munch)\ **Post date:** [May 22, 2013, 3:36pm UTC](https://boards.straightdope.com/t/the-nfl-is-tax-exempt-wtf/659011/15 "2013-05-22T15:36:30Z")
> [@Amateur\_Barbarian](#): > > I also understand the difference between nonprofit and not-for-profit organizations. There is none, the terms are interchangeable. ---
**Author:** ![11811](https://avatars.discourse-cdn.com/v4/letter/1/9d8465/32.png) [@11811](https://boards.straightdope.com/u/11811)\ **Post date:** [May 22, 2013, 3:44pm UTC](https://boards.straightdope.com/t/the-nfl-is-tax-exempt-wtf/659011/16 "2013-05-22T15:44:56Z")
> [@DCnDC](#): > > While I agree that it’s outrageous that the NFL is considered a “non-profit organization,” let’s be clear here: **it’s the NFL that is the NPO** ; the individual teams are for-profit companies and taxed accordingly. And have stadiums built for them with city and state taxes. ---
**Author:** ![chargerrich](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/chargerrich/32/5399_2.png) [@chargerrich](https://boards.straightdope.com/u/chargerrich)\ **Post date:** [May 22, 2013, 4:02pm UTC](https://boards.straightdope.com/t/the-nfl-is-tax-exempt-wtf/659011/17 "2013-05-22T16:02:01Z")
I am curious why we are arguing over any legalities… I do not think anyone in this thread has even suggested anything illegal. However IMO I maintain that the spirit of why the not for profit designation exists has been completely obliterated by the NFL and their use of such a designation. When most people think of not for profit organizations we think of churches, charities, outreach programs, educational institutions and relief organizations… not one of the single largest entertainment revenue producers in our nation with some of - if not the - highest paid wage earners across every single level of their organization. ---
**Author:** ![Amateur\_Barbarian](https://avatars.discourse-cdn.com/v4/letter/a/59ef9b/32.png) [@Amateur\_Barbarian](https://boards.straightdope.com/u/Amateur_Barbarian)\ **Post date:** [May 22, 2013, 4:04pm UTC](https://boards.straightdope.com/t/the-nfl-is-tax-exempt-wtf/659011/18 "2013-05-22T16:04:21Z")
> [@Cheesesteak](#): > > [Here you go.](http://www.deseretnews.com/article/865564748/The-NFL-NHL-PGA-are-all-nonprofit-tax-exempt-organizations.html?pg=all) Yes, the other pro sports organizers. I included that (if vaguely) in my above. Find me a for-profit industry in any other field allowed to organize and manage under a nonprofit org. ---
**Author:** ![Amateur\_Barbarian](https://avatars.discourse-cdn.com/v4/letter/a/59ef9b/32.png) [@Amateur\_Barbarian](https://boards.straightdope.com/u/Amateur_Barbarian)\ **Post date:** [May 22, 2013, 4:06pm UTC](https://boards.straightdope.com/t/the-nfl-is-tax-exempt-wtf/659011/19 "2013-05-22T16:06:09Z")
> [@Munch](#): > > There is none, the terms are interchangeable. Not completely. But there is significant overlap, yes. ---
**Author:** ![Ellen\_Cherry](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ellen_cherry/32/3600_2.png) [@Ellen\_Cherry](https://boards.straightdope.com/u/Ellen_Cherry)\ **Post date:** [May 22, 2013, 4:09pm UTC](https://boards.straightdope.com/t/the-nfl-is-tax-exempt-wtf/659011/20 "2013-05-22T16:09:38Z")
Moving from MPSIMS to Game Room. [Next page](https://boards.straightdope.com/t/the-nfl-is-tax-exempt-wtf/659011.md?page=2)