Does the NFL Pay Taxes?

NFL football sunset

The NFL does pay taxes, kind of.

A Tax Free Start

In the 1900s, the National Football League and the American football league were two separate things, and they didn’t get along. However, before the feuding got out of hand, they reached a deal. Instead of two separate leagues, they would join and make two sides of the same coin.

But there was a catch. The two leagues joining would create a monopoly, seriously violating the anti-trust act. They successfully lobbied for a loop-hole solution to their problem. If they’re suddenly considered a non-profit then anti-trust laws wouldn’t apply.

Doesn't NFL Pay taxes and deemed non-profit

The strange loop-hole worked. At the time, no one batted an eye at the thought of this small ‘club’ becoming a nonprofit; the National Football League wasn’t the powerhouse it’s viewed as today.

However, as time progressed and they turned into a billion dollar industry, people began to sing a different tune.

The NFL volunteers to pay taxes

While many see this as a boon to taxes and a way for more organizations to pay their fair share, is that really what this is? NFL Commissioner, Roger Goodell stated the tax exemption was a “distraction” and “has been mischaracterized repeatedly.”

Nevertheless, this only changes their tax liability from an income point of view. This doesn’t mean they’re paying taxes everywhere, or on everything.

The NFL’s tax benefits don’t just come directly from the IRS, they also come from federal, state, and local bonds. The cost to tax payers is over 3.2 Billion dollars, from just 2000-2017. These bonds are used to build NFL stadiums all over the country. However, they are typically used to build bridges and water services. Meaning that while the NFL officially pays taxes, they are still receiving tax benefits

To combat this, several bills have been introduced, like this one, a bipartisan bill from 2017. However, no bill surrounding this issue has made it into law.

Please note: this blog is for informational purposes and should not to be considered, or used in place of, professional advice for your specific situation.

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