The NFL's league office will drop its tax-exempt status in response to critics who claim that the government is losing millions of dollars in potential revenue.
As a result, the NFL, a business of about $10 billion in annual revenues, will no longer have to publicly disclose its tax returns, which include the salaries of its top executives, including Commissioner Roger Goodell. Major League Baseball took a similar step several years ago. The league offices of the NHL, the LPGA and several other sports organizations still have tax-exempt status.
Although the NFL's 32 teams are for-profit businesses that pay taxes, the league office has operated as a tax-exempt industry association in various forms since the 1940s. Under the tax code, the league is considered the marketing arm of the teams.
For years, former Sen. Tom Coburn, R-Okla., criticized the league's status. The chorus of critics rose in 2014 when the league office's filings with the IRS showed that Goodell received $44.2 million in fiscal 2012. Goodell was paid $35 million in 2013.
"The owners have decided to eliminate the distraction associated with misunderstanding of the league office's status," said Bob McNair, the owner of the Houston Texans and the chairman of the league's finance committee.
Tuesday's change does not affect the NFL's antitrust exemption, created in the Sports Broadcasting Act of 1961. That allows clubs to negotiate radio and TV broadcast rights together.
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