NFL voluntarily gives up tax-exempt status

By Andrea Hangst

Since 1942, the National Football League has been considered a tax-exempt non-profit organization. While each of the league’s now-32 teams are taxable entities, the NFL’s league office has long been exempt. Now, the league has decide it is time for a change, with commissioner Roger Goodell informing teams on Tuesday that the league office will also be a taxable entity.

Goodell released a memo to all 32 teams on Tuesday. It reads (via USA Today's Brent Schrotenboer):

A statement released by Houston Texans owner Bob McNair, who is also chairman of the NFL’s finance committee, echoed Goodell’s memo and also characterized the old setup as a “distraction:”

The NFL does not stand to lose a great deal of money by losing its tax-exempt status, which Bloomberg's Richard Rubin estimates will be $109 million over the next 10 years. In contrast, the NFL earned $10 billion in profits in just 2013 alone.

There had been multiple pushes by Congress to strip the NFL’s league office of its tax exempt status, including a recent attempt by Representative Jason Chaffetz, R-Utah. Though none of these attempts have passed the House or the Senate, the din has gotten louder as the league’s revenue has risen. Chaffetz and his colleague, Rep. Elijah Cummings, R-Maryland, released a statement praising Goodell’s decision (also via USA Today):

This move also brings some relief to Goodell and the league. As a tax-exempt non-profit, the NFL was required to publicly disclose financial data, including Goodell’s yearly salary and parts of their tax filings. Now, that information can remain private. Goodell, it should be noted, made $35 million in salary and various bonuses in 2013.

The NHL is now the last remaining professional sports league in the United States that has federal tax-exempt status; the MLB rescinded their non-profit status in 2007, while the NBA had never been a tax-exempt league.

More from Sportsnaut: