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  • 2014-09-18 (xsd:date)
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  • Is the NFL a Tax-Exempt Non-Profit Organization? (en)
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  • In September 2014, amid controversy over the National Football League's (NFL) handling of domestic abuse cases involving some of its players, Senator Cory Booker of New Jersey introduced a bill that sought to accomplish what other members of Congress had previously attempted to do: disallow professional sports leagues, including the NFL, from claiming status as tax-exempt nonprofit organizations. This news prompted many of our readers to inquire, Huh, is the NFL really tax-exempt? How is that?: It was true that the NFL, a sports league that generates an estimated $9.5 billion in revenue each year, enjoyed the status of being a tax-exempt nonprofit organization, a status that had also applied to the National Hockey League, the PGA Tour, and Major League Baseball (until 2007). But the key to understanding that exemption is realizing that it did not apply to the dozens of individual teams who are football's primary money-makers, but only to a small part of the NFL, the NFL League Office: The NFL was first bestowed with its tax-exempt status in 1942, when the league was struggling financially amidst the entry of the U.S. into World War II and (successfully) filed an application for tax-exempt, non-profit status with the IRS. Exactly what the NFL claimed its nonprofit mission was back then remains something of a mystery, as the NFL maintained it lost the copy of the application it filed with the IRS in 1942, and the IRS likewise said it was unable to find a copy of the NFL's original application. Some critics have maintained that the NFL (and the NFL alone, not other sports leagues) was tax-exempt due to a special loophole inserted into the tax code in 1966, referencing Section 501(c)(6) of the IRS code, a section that specifically includes Professional football leagues along with business leagues, chambers of commerce, real-estate boards, or boards of trade as tax-exempt organizations. However, the NFL had been afforded tax-exempt status well before that modification was enacted — the code change was undertaken solely to allow the merger of the NFL and AFL (American Football League) to go forward without fear of an antitrust challenge under either the Clayton Antitrust Act or the Federal Trade Commissions Act: Still, some critics maintained that the NFL should never have been granted tax-exempt status in the first place, much less have been allowed to maintain it for so long, as the league was neither an open industry nor one that worked towards the greater good of its industry or the public at large: In April 2015, the NFL announced the league office would be giving up its status as a tax-exempt organization during the 2015 fiscal year: (en)
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