Pro Sports Leagues Targeted in Tax Reform Movement

Taxing NFL and NHL could add $109 million to federal revenue

Professional sports leagues like the National Football League and the National Hockey League are getting swept up in the move towards tax reform in Congress.

Two bills introduced in the the House and the Senate would take away the leagues' non-profit tax exempt status. Currently, the team franchises are taxable, but the leagues themselves are not.

As Rep. Jason Chaffetz (R-Utah) said when he introduced the Properly Reducing Overexemptions (PRO) Sports Act, "in reality, the NFL and the NHL are for-profit businesses, and they should be taxed as such. They are not charities nor are they traditional trade organizations like local chambers of commerce."

The NFL is inarguably one of the biggest moneymakers on the planet, generating billions annually. Half of the league's teams are are valued at over $1 billion, according to the NFL's own tax filings. NFL commissioner Roger Goodell's compensation came in at nearly $30 million. The Joint Committee on Taxation estimated that the nonprofit status is worth about $10 million annually to major pro sports leagues and would increase federal revenue by $109 million over the next 10 years.

Chaffetz's bill is identical to the legislation introduced last fall by Sen. Tom Coburn (R-Okla.)

The bills, which could become part of comprehensive tax reform being worked on in both chambers, aren't going to win either lawmaker any fans from the mighty leagues.

"Probably not getting any Super Bowl invites from the NFL after introducing this bill," tweeted Chaffetz on Wednesday afternoon.

The proposals aren't all that new and the leagues have managed to swat back any changes to their tax status in the past. But with mounting debt, increasing government spending and never-ending budget fights, the appetite for tax reform is as strong as it has ever been.