The National Football League announced on Tuesday that it will end its tax-exempt status beginning with the 2015 fiscal year.
Commissioner Roger Goodell released a statement announcing the change, which comes following a long history of criticism from lawmakers and citizens who felt the NFL should have to pay taxes.
“Every dollar of income generated through television rights fees, licensing agreements, sponsorships, ticket sales, and other means is earned by the 32 clubs and is taxable there,” Goodell wrote in letters sent to team owners and U.S. Congress members. The letters were dated Tuesday, Bloomberg reports.
“This will remain the case even when the league office and Management Council file returns as taxable entities, and the change in filing status will make no material difference to our business,” Goodell added. He referred to the tax-exempt status previously held by the NFL as a “distraction,” saying that it has “been mischaracterized repeatedly in recent years.”
“The fact is that the business of the NFL has never been tax exempt,” he said.
Removing the tax-exempt status will not only be a minimal cost for Goodell and the league, – an estimated $109 million over the next 10 years – it will also eliminate the requirement that Goodell’s salary and other league information be made public. The league's revenue in 2013 was $10 billion.
“The NFL just probably realized it didn’t have much to give up and they’re gaining the ability to not reveal salary information,” University of New Hampshire professor Michael McCann told Bloomberg. Goodell earned $35 million in salary and bonuses in 2013.
“It is rewarding to see such an important and positive step toward restoring basic fairness,” Republican Rep. Jason Chaffetz of Utah and Democrat Rep. Elijah Cummings of Maryland said in a joint statement. Chaffetz is the Chairman of the House Oversight and Government Reform Committee, and Cummings is a ranking member. Last month, Chaffetz informed Goodell that the committee would be reviewing the NFL's tax-exempt status, the Huffington Post reports.
“We hope other professional sports organizations in similar situations will follow the positive example set by the NFL, and we look forward to rightfully returning millions of dollars to the federal treasury as a result," the two lawmakers' statement added.
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