Other local teams not wild about 2 tax ideas for Vikings stadium

A memorabilia tax and a surcharge on NFL salaries face political and legal hurdles.

hide

A tax on jerseys and other sports memorabilia is being proposed as part of the Vikings stadium funding plan.

Photo: David Joles, Star Tribune

CameraStar Tribune photo galleries

Cameraview larger

Although the road costs are getting all the ink, two proposed taxes to help pay the state's share of a $1.1 billion Vikings stadium also may prove to be stumbling blocks in completing a deal.

One is a 10 percent tax on the sale of pro sports memorabilia. A Revenue Department study in April estimated the tax would generate $17.6 million a year by 2015. But the latest state figures show it would yield just $8.1 million annually.

The tax has detractors in pro sports teams, including the Twins and the Wild, whose merchandise would be taxed to help build a football stadium.

The other tax is one the Vikings themselves have raised questions about -- an income tax surcharge on NFL players who play in the new stadium. The tax would generate $7.8 million annually, but NFL officials reportedly believe it may not be constitutional.

Asked about that last week, NFL senior vice president Greg Aiello said: "We are aware of the issue and are studying it, but do not choose to comment about it at this time."

Ted Mondale, who is Gov. Mark Dayton's stadium czar as chair of the Metropolitan Sports Facilities Commission, said the single biggest issue to solve remains the question of how to pay for road upgrades in the area of the proposed Arden Hills stadium.

But the state's piece of the stadium financing, along with how the team and state will share operating responsibilities, must be resolved, he said.

The state needs to find about $23 million a year to finance its $300 million share, Mondale said. With the reduced estimate in memorabilia tax revenue, it probably will have to tap other revenue streams.

"A lot of those taxes we didn't think we needed, like the player income surcharge and others," Mondale said. "Now we do."

Pro athletes would pay extra

Under the stadium bill introduced in April, the state would contribute $300 million toward a new stadium with a series of so-called user fees and taxes. The Vikings and Ramsey County have agreed to pay $757 million to build a stadium on a former munitions plant site in Arden Hills.

State funding includes a 5 percent surcharge on the income earned by NFL players during games at the new stadium. The bill targets all NFL employees making more than $250,000 a year who work at the new stadium, which could include team executives.

Imposing a special tax on a select class of people could violate constitutional standards of equal protection, said David Larson, a Hamline University Law School professor who teaches labor and employment law.

Pro athletes "already are being taxed at a rate consistent with other income earners in the state," Larson said. Taxing individuals within an income group is "problematic," he said.

Is tax on pro sports gear fair?

Until now the memorabilia tax has been the centerpiece of several funding measures in the stadium bill, which backers hope to have ready this week should a special session be called by the end of the month to solve the state's budget crisis.

It would steer money from the sale of Twins, Wild and Timberwolves gear -- among other pro sports teams and leagues -- toward building the Vikings stadium.

The Wild and Twins don't like that idea. Neither do sports merchandisers, who fear it will hurt business.

"Our fans are going to be taxed to build a Vikings' stadium. I don't see the fairness in that," said Jeff Pellegrom, the Wild's chief financial officer.

The Twins also oppose the tax, team spokesman Kevin Smith said.

"We all want the Vikings to get their stadium, and the Vikings obviously do pay their fair share of the taxes to Hennepin County that built our ballpark," Smith said. But a memorabilia tax would make Twins merchandise "unaffordable" to many fans, he said.

Several calls to the Wolves were not returned.

Rep. Morrie Lanning, R-Moorhead, one of the bill's authors, wasn't sympathetic to the sports teams' complaints.

"They've benefited from their [publicly supported] facilities, and every one of them will be asking the public to support improvements down the road," he said.

The philosophy behind the tax, he said, is that fans benefiting from the facility should help pay for it. "Through the purchase of sports memorabilia you've got fans who are obviously involved not only supporting the Vikings, but the other teams," he said.

Backdoor tax on clothing?

Questions dogging the memorabilia tax revolve around fairness and effectiveness.

The memorabilia tax would be figured on the amount of wholesale sales and would be paid by retailers, who typically pass along such costs to their customers.

The bill doesn't specify who would be subject to the tax, but the Revenue Department lists the NFL, Major League Baseball, the NHL, the NBA, NASCAR, Major League Soccer, World Wrestling Entertainment, the International Federation of Association Football and the Football Association.

Anything licensed by pro sports leagues or teams would be taxed, including trading cards, photos, sports clothing, gear and special items related to a particular player, team or event.

Pellegrom said the memorabilia tax would open a back door to a sales tax on clothing. He said such a tax might be easier to swallow if the stadium bill included a "global solution" for helping to fund all the pro sports arenas in town.

But the bill would have the Vikings paying a little more than one-third of the cost for their new stadium, he said, while "we're paying 86 percent of our building costs."

Opponents of the tax say it also would kill memorabilia sales in Minnesota by causing higher prices that would drive buyers to shop online. And it could expand the black market of counterfeit jerseys and clothing that aren't licensed by leagues or teams, they said.

Ray Crump Sr., a veteran sports merchandiser whose downtown Minneapolis shop is a long kickoff away from the Metrodome, said tax revenue would fluctuate with the fortunes of the teams.

Even good years are no guarantee, he said, because there are far fewer memorabilia shops to tax than there used to be.

"I don't care if [the Vikings] go to the Super Bowl, they're not going to take in that kind of money," Crump said.

Kevin Duchschere • 612-673-4455

  • get related content delivered to your inbox

  • manage my email subscriptions

ADVERTISEMENT

Los Angeles - WP: C. Kershaw 14 FINAL
Chicago Cubs - LP: E. Jackson 5
Boston 3 Bottom 5th Inning
Baltimore 1
Milwaukee 2 Bottom 6th Inning
Pittsburgh 0
Toronto 3 Top 7th Inning
NY Yankees 5
Washington 3 Top 6th Inning
Miami 2
Chicago WSox 4 Top 5th Inning
Tampa Bay 3
NY Mets 0 Top 5th Inning
Atlanta 0
Cleveland 0 Bottom 3rd Inning
Minnesota 1
Detroit 4 Bottom 2nd Inning
Kansas City 0
Seattle 0 Top 3rd Inning
Houston 1
Arizona 1 Bottom 3rd Inning
Colorado 0
Cincinnati 1 Top 3rd Inning
St. Louis 2
Philadelphia - D. Buchanan 8:35 PM
Oakland - J. Lester
Texas - L. Bonilla 9:05 PM
LA Angels - H. Santiago
San Francisco - T. Hudson 9:10 PM
San Diego - O. Despaigne
San Diego 9/21/14 12:00 PM
Buffalo
Dallas 9/21/14 12:00 PM
St. Louis
Washington 9/21/14 12:00 PM
Philadelphia
Houston 9/21/14 12:00 PM
NY Giants
Minnesota 9/21/14 12:00 PM
New Orleans
Tennessee 9/21/14 12:00 PM
Cincinnati
Baltimore 9/21/14 12:00 PM
Cleveland
Green Bay 9/21/14 12:00 PM
Detroit
Indianapolis 9/21/14 12:00 PM
Jacksonville
Oakland 9/21/14 12:00 PM
New England
San Francisco 9/21/14 3:05 PM
Arizona
Denver 9/21/14 3:25 PM
Seattle
Kansas City 9/21/14 3:25 PM
Miami
Pittsburgh 9/21/14 7:30 PM
Carolina
Chicago 9/22/14 7:30 PM
NY Jets
NY Giants 9/25/14 7:25 PM
Washington
(5) Auburn 20 FINAL
(20) Kansas State 14
Connecticut 0 2nd Qtr 9:45
So Florida 14
Old Dominion 9/20/14 11:00 AM
Rice
Troy 9/20/14 11:00 AM
(13) Georgia
Georgia Tech 9/20/14 11:00 AM
Virginia Tech
Eastern Mich 9/20/14 11:00 AM
(11) Michigan State
Iowa 9/20/14 11:00 AM
Pittsburgh
Bowling Green 9/20/14 11:00 AM
(19) Wisconsin
Maryland 9/20/14 11:30 AM
Syracuse
Tulane 9/20/14 11:30 AM
Duke
Hawaii 9/20/14 1:00 PM
Colorado
Marshall 9/20/14 1:00 PM
Akron
North Carolina 9/20/14 2:30 PM
East Carolina
Army 9/20/14 2:30 PM
Wake Forest
Virginia 9/20/14 2:30 PM
(21) BYU
(6) Texas A&M 9/20/14 2:30 PM
SMU
Rutgers 9/20/14 2:30 PM
Navy
Central Mich 9/20/14 2:30 PM
Kansas
Utah 9/20/14 2:30 PM
Michigan
Florida 9/20/14 2:30 PM
(3) Alabama
Louisville 9/20/14 2:30 PM
FIU
Fla Atlantic 9/20/14 3:00 PM
Wyoming
Indiana 9/20/14 3:00 PM
(18) Missouri
San Jose St 9/20/14 3:00 PM
Minnesota
Texas State 9/20/14 3:00 PM
Illinois
Massachusetts 9/20/14 3:00 PM
Penn State
Georgia State 9/20/14 5:00 PM
Washington
Appalachian St 9/20/14 6:00 PM
Southern Miss
Miss State 9/20/14 6:00 PM
(8) LSU
Northern Ill 9/20/14 6:00 PM
Arkansas
Middle Tennessee 9/20/14 6:00 PM
Memphis
Utah State 9/20/14 6:00 PM
Arkansas State
Miami-Ohio 9/20/14 6:00 PM
Cincinnati
Idaho 9/20/14 6:00 PM
Ohio U
Ball State 9/20/14 6:00 PM
Toledo
(14) So Carolina 9/20/14 6:30 PM
Vanderbilt
(4) Oklahoma 9/20/14 6:30 PM
West Virginia
Ga Southern 9/20/14 6:30 PM
South Alabama
UNLV 9/20/14 7:00 PM
Houston
(22) Clemson 9/20/14 7:00 PM
(1) Florida State
Miami-Florida 9/20/14 7:00 PM
(24) Nebraska
New Mexico 9/20/14 7:00 PM
New Mexico St
California 9/20/14 9:00 PM
Arizona
Louisiana 9/20/14 9:30 PM
Boise State
(2) Oregon 9/20/14 9:30 PM
Washington St
San Diego St 9/20/14 9:30 PM
Oregon State
Texas Tech 9/25/14 6:30 PM
(25) Oklahoma State
Appalachian St 9/25/14 6:30 PM
Ga Southern
(12) UCLA 9/25/14 9:00 PM
(15) Arizona State
Middle Tennessee 9/26/14 7:00 PM
Old Dominion
Fresno State 9/26/14 7:00 PM
New Mexico
(1) Florida State 9/27/14 2:00 AM
NC State
Duke 9/27/14 2:00 AM
Miami-Florida
North Carolina 9/27/14 2:00 AM
(22) Clemson
Colorado 9:00 PM
Real Salt Lake
Toronto 9:00 PM
Brt Columbia
Edmonton 9/20/14 6:00 PM
Hamilton
Calgary 9/21/14 12:00 PM
Montreal
Ottawa 9/21/14 3:00 PM
Saskatchewan
Montreal 9/26/14 6:00 PM
Ottawa
Saskatchewan 9/26/14 9:00 PM
Edmonton
Hamilton 9/27/14 5:30 PM
Winnipeg
Brt Columbia 9/27/14 8:30 PM
Calgary
Connect with twitterConnect with facebookConnect with Google+Connect with PinterestConnect with PinterestConnect with RssfeedConnect with email newsletters

ADVERTISEMENT

ADVERTISEMENT

Date/Opponent Time W L Score
2014 preseason     
Aug 8 - vs. Oakland 7 pmX10-6
Aug 16 - vs. Arizona 7:30 pmX30-28
Aug 23 - at Kansas City 7 pmX30-12
Aug 28 - at Tennessee 7 pmX19-3
2014 regular season     
Sep 7 - at St. Louis NoonX34-6
Sep 14 - vs. New England NoonX30-7
Sep 21 - at New Orleans Noon
Sep 28 - vs. Atlanta 3:25 pm
Oct 2 - at Green Bay 7:25 pm
Oct 12 - vs. Detroit Noon
Oct 19 - at. Buffalo Noon
Oct 26 - at Tampa Bay Noon
Nov 2 - vs. Washington Noon
Nov 9 - Bye
Nov 16 - at Chicago Noon
Nov. 23 - vs. Green Bay Noon
Nov. 30 - vs. Carolina Noon
Dec 7 - vs. NY Jets Noon
Dec 14 - at Detroit Noon
Dec 21 - at Miami Noon
Dec 28 - vs. Chicago Noon

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

question of the day

Poll: How will the Vikings and Gophers do this weekend?

Weekly Question

ADVERTISEMENT

 
Close