NFL will forfeit tax-exempt status

The NFL will forfeit its tax-exempt status, commissioner Roger Goodell told owners in a memo Tuesday. 
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The NFL will forfeit its tax-exempt status, commissioner Roger Goodell told owners in a memo sent Tuesday. 

"[A] change in the tax status will not alter the function or operation of the league office or Management Council in any way," Goodell wrote in the memo, which was obtained by Bloomberg's Scott Soshnick.

The NFL's individual teams all pay taxes but the league office does not. The NFL has argued that it operates as a not-for-profit trade association, distributing revenue to its clubs, who in turn pay taxes. 

Goodell said in the memo that the league's tax status has "been mischaracterized repeatedly in recent years" and that the league has therefore "decided to eliminate this distraction."

Forfeiting its tax-exempt status also no longer means the NFL will be required to disclose compensation figures for Goodell and other top executives.

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[daily_cut.NFL]"It doesn't pass the laugh test of being something that's a not-for-profit trade association," Ryan Alexander, president of Taxpayers for Common Sense, told Reuters last month. "There's no evidence the NFL would collapse without this exemption."

The NFL does not operate like a typical non-profit trade organization, Washington, D.C., attorney Jeffrey Tenenbaum told in 2013

"To be a 501(c)(6) organization, anyone who meets your requirements for who's part of the industry has to be allowed to join the association as a member. With professional sporting leagues, that's not the case; it's a very closed circle," Tenenbaum said. "You can't start a professional football team and join the NFL."

In recent years, several politicians have supported legislation to make the NFL starting paying taxes. Washington senator Maria Cantwell, New Jersey senator Cory Booker and Utah congressman Jason Chaffetz have all argued that the league should be taxed. A petition on calling for Congress to revoke the NFL's tax-exempt status has more than 429,500 signatures. ​

The NHL is also tax-exempt, while MLB forfeited its tax-free status in 2008. The NBA has never been a tax-exempt organization. 

Goodell sent a copy of his memo to Wisconsin congressman Paul Ryan, the chairman of the House Ways and Means Committee, according to the Associated Press.

- Dan Gartland