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04-30-2013, 03:18 AM
  #11
epo
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I'm not sure what exactly the benefit of the league being tax-exempt (501(c)(6) to be exact) is, but I'm reading that it isn't as beneficial as the descriptions imply.

http://thelegalblitz.com/blog/2012/1...ax-exemptions/

The fact that the NBA has never been organized under this classification, and that the MLB changed into a for-profit business 5 years ago, suggest that it isn't all that great of a tax loophole.

Quote:
Originally Posted by mouser View Post
The NFL itself doesn't pay taxes. When revenue collected by the league is passed onto the individual teams then the teams pay taxes on that distributed revenue.

Where the real exploitation comes about is that the teams each pay somewhere around $6-7m in "membership dues and assessments" to the league office each season. Those payments are considered donations to a non-profit, so the team owners can use them to reduce their tax burdens.

From the IRS website:

Tax treatment of donations - 501(c)(6) organizations
Contributions to section 501(c)(6) organizations are not deductible as charitable contributions on the donor’s federal income tax return. They may be deductible as trade or business expenses if ordinary and necessary in the conduct of the taxpayer’s business. The donee organization may be required to make certain disclosures and pay a proxy tax in connection with the dues payment, however.

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