How is the NFL a non profit and pay no taxes ?
Ilovecards
Posts: 271 ✭
I never knew till today that the NFL was a non profit and pays no taxes , really odd... how can that be ?
I edit almost all my posts because my auto correct is crazy !
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Nick
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<< <i>Because it's a pass-through for revenue, which ends up with the teams, who aren't nonprofits.
Nick >>
^ This
all this from tax free income they earn. For what reason are they not taxed , yet tax payers often subsidize their stadiums and teams.
<< <i>The NFL is a religion. Church of the NFL pays no taxes
haha I like that
Nick
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<< <i>that is not true at all .. The NFL paid Godell in 2011 29 million dollars alone. the NFL in 2011 earned 255 million dollars tax free .
all this from tax free income they earn. For what reason are they not taxed , yet tax payers often subsidize their stadiums and teams. >>
This probably stems from not understanding what a non-profit is. The Salvation Army had $4 billion in revenues and probably pays its top people very well, yet it is a classic not-for-profit organization. There aren't any shareholders, investors, owners, etc., who expect a payout.
As for the outrageous salaries the NFL (not teams) pay it's executives; Roger Goddell paid income tax last year as did every ref and other executive in the NFL.
"Be who you are and say what you feel, because those who mind don't matter and those who matter don't mind." Dr. Seuss
<< <i>This probably stems from not understanding what a non-profit is. The Salvation Army had $4 billion in revenues and probably pays its top people very well, yet it is a classic not-for-profit organization. There aren't any shareholders, investors, owners, etc., who expect a payout. >>
Looks like their head makes about1 100th of Goodell. The heads of most major non-profits have similar salaries. While the pass-through enables a bit of a tax dodge, there are certainly much bigger offenders of tax evasion than the NFL.
<< <i>
Looks like their head makes about1 100th of Goodell. The heads of most major non-profits have similar salaries. >>
Which is entirely irrelevant to the overall point, which is that even non-profits have to pay the people who work for them.
fwiw, I'm guessing that when you add up player salaries and team revenues, the NFL as an entity pays its fair share of taxes, so the non-profit line is a bit of a red herring.
<< <i>I believe it's quite relevant that other non-profits do not also pay top people 'very well'. the assumption that more pay for top employees = more results is filled with flaws, but the basis for why CEO salaries are so sky-high today. The NFL can pay Goodell 3 million, 30 million or 300 million - it won't change how well he does his job. >>
Not sure how you got on the tangent of $$$ does not equal results, but that's even less relevant than the previous post.
The basics:
The original poster wondered why the NFL is considered a non profit, and pointed to a high salary as proof that it's not.
The rest of us know that non-profits pay salaries, so the fact that a non-profit pays someone millions does not make it a profit-seeking organization.
That's it.
in sum, the NFL's a mess, and the ginger hammer makes a whole bunch of money.
<< <i>but the NFL is a profit-seeking organization, no matter how you define the shell for tax purposes. what goodell is paid matters, because those that profit from the NFL's operations believe that they are adding value to their own bottom line by paying him as they do. the two are inextricably related. >>
The NFL is not a profit seeking organization. They are an organization set up for the betterment of 32 NFL teams and football at all levels. There only purpose is to aid these organizations.
It's a tax loophole, but it makes sense to most who can differentiate the NFL from its' teams.
"Be who you are and say what you feel, because those who mind don't matter and those who matter don't mind." Dr. Seuss
<< <i>...in effect... >>
That's where your argument falls apart. They aren't shareholders. The NFL distributes the money, just as defined in the tax code. Are you really suggesting that the NFL Office should be taxed once, and then the teams should then be taxed again on the exact same money?
Let's say the NFL was a partnership whose partners were all 32 teams. The partnership, in the course of operation, pays its employees. At the end of the day, the net income of the partnership is not taxed at the partnership level, but distributes the net income to the partners, who pay the tax on their distributive interest.
The point here is that even a for-profit entity can operate without paying tax on its profits. When structured properly, it can merely be a vehicle to pass profits to the interested parties.
Edited to clarify that those interested parties would then pay tax on their share.
<< <i>The logistics here are no different here than a partnership that operates to make a profit.
Let's say the NFL was a partnership whose partners were all 32 teams. The partnership, in the course of operation, pays its employees. At the end of the day, the net income of the partnership is not taxed at the partnership level, but distributes the net income to the partners, who pay the tax on their distributive interest.
The point here is that even a for-profit entity can operate without paying tax on its profits. When structured properly, it can merely be a vehicle to pass profits to the interested parties.
Edited to clarify that those interested parties would then pay tax on their share. >>
the difference is as I stated in 2011 alone they netted 255 million dollars of income. that is the NFL offices , tax free. The NFL brought in 9 billion dollars but the Offices Netted 255 million.
That's a lot of tax free money nothing was distributed down
<< <i>Not a tax attorney by any means, but essentially its the same type of misunderstanding when the argument of corporations paying taxes comes up. If a corporation makes $10 billion profit, but uses that money to pay out to the shareholders, then a corporation pays ZERO in tax, since they technically did not make a profit. However, you hear a lot of screaming about raising the corporate tax, which essentially would not generate much if any revenue. The NFL, like most "non profit" organizations may be allowed to keep money on hand for operating expenses to better the team owners. >>
yeah except the nfl offices makes an excess of 255 million net a year tax free.
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<< <i>...in effect... >>
That's where your argument falls apart. They aren't shareholders. The NFL distributes the money, just as defined in the tax code. Are you really suggesting that the NFL Office should be taxed once, and then the teams should then be taxed again on the exact same money? >>
No the NFL makes 9 billion dollars a year passed through to the NFL teams ... THE NFL OFFICES net 255 million plus a year non taxed, not distributed down the line. 255 net income tax free .
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the difference is as I stated in 2011 alone they netted 255 million dollars of income. that is the NFL offices , tax free. The NFL brought in 9 billion dollars but the Offices Netted 255 million.
That's a lot of tax free money nothing was distributed down >>
Again, you have inaccurate information. The NFL claimed $255 million in revenue, not in net profit. Now look up how much of that $255 million they spent.
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<< <i>
<< <i>...in effect... >>
That's where your argument falls apart. They aren't shareholders. The NFL distributes the money, just as defined in the tax code. Are you really suggesting that the NFL Office should be taxed once, and then the teams should then be taxed again on the exact same money? >>
No the NFL makes 9 billion dollars a year passed through to the NFL teams ... THE NFL OFFICES net 255 million plus a year non taxed, not distributed down the line. 255 net income tax free . >>
Continuing to call it net income doesn't make you right.
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<< <i>
<< <i>
<< <i>...in effect... >>
That's where your argument falls apart. They aren't shareholders. The NFL distributes the money, just as defined in the tax code. Are you really suggesting that the NFL Office should be taxed once, and then the teams should then be taxed again on the exact same money? >>
No the NFL makes 9 billion dollars a year passed through to the NFL teams ... THE NFL OFFICES net 255 million plus a year non taxed, not distributed down the line. 255 net income tax free . >>
Continuing to call it net income doesn't make you right. >>
Out of $9.5 billion, about half of that goes out in player salaries, after distributions to the owners the league office nets about $225 million (2.7%) and has a total profit of $77.6 million. At the 35% corporate tax rate, that is about $27 million in taxes potentially owed
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<< <i>
the difference is as I stated in 2011 alone they netted 255 million dollars of income. that is the NFL offices , tax free. The NFL brought in 9 billion dollars but the Offices Netted 255 million.
That's a lot of tax free money nothing was distributed down >>
Again, you have inaccurate information. The NFL claimed $255 million in revenue, not in net profit. Now look up how much of that $255 million they spent. >>
no it was 255 in net income not net profit , and they the net profit was 75 million.. what are you talking about ?
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no it was 255 in net income not net profit , and they the net profit was 75 million.. what are you talking about ? >>
Am I being punk'd? Net income and net profit are the same thing. They teach that in 10th grade economics. The NFL claimed a loss in the year you are talking about.
<< <i>The NFL had revenues of $255 million and expenses of $332 million. It's out there on teh internets. >>
so its about to enter bankruptcy ?
<< <i>so its about to enter bankruptcy ? >>
Not exactly an MBA candidate are we?
Bankruptcy has to do with assets and debts, not revenue and expenses.
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no it was 255 in net income not net profit , and they the net profit was 75 million.. what are you talking about ? >>
Am I being punk'd? Net income and net profit are the same thing. They teach that in 10th grade economics. The NFL claimed a loss in the year you are talking about. >>
no
Net income is the total revenue in an accounting period minus all expenses during the same period. If income taxes and interest are not deducted, it is called net profit or operating profit (or Loss, as the case may be). Also called earnings or net earnings
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<< <i>so its about to enter bankruptcy ? >>
Not exactly an MBA candidate are we?
Bankruptcy has to do with assets and debts, not revenue and expenses. >>
if a company is in the red every year , then that company has debts not paid.
You are saying the NFL is not making its payments ? It can be dissolved into bankruptcy by its creditors then.
Unless what you are stating about their loss is false.
Reading a definition on the internet and not understanding it would lead you to write what you wrote about net income. The concept is so basic to most of us that at this point I'm not really sure how you're messing it up, or how to make you understand it. Ignorance is acceptable. Ignorance + condescending stubbornness is just silly.
Your bankruptcy theory is just as bad. It is entirely plausible to have a year in which you spend more than you make. Perhaps they used cash reserves. Maybe it's now on the books as long-term debt. Households do it all the time. No one said anything about the NFL not being able to make payments. They had $xxxx in revenue and spent $xxxx + $yyyy. Elementary stuff.
<< <i>I feel like I'm talking to one of my students, with the exception being that they want to learn. They don't come in and argue basic facts with which they have zero experience.
Reading a definition on the internet and not understanding it would lead you to write what you wrote about net income. The concept is so basic to most of us that at this point I'm not really sure how you're messing it up, or how to make you understand it. Ignorance is acceptable. Ignorance + condescending stubbornness is just silly.
Your bankruptcy theory is just as bad. It is entirely plausible to have a year in which you spend more than you make. Perhaps they used cash reserves. Maybe it's now on the books as long-term debt. Households do it all the time. No one said anything about the NFL not being able to make payments. They had $xxxx in revenue and spent $xxxx + $yyyy. Elementary stuff. >>
so they do make a profit in some years ? you make it sound that they would not need to pay taxes at all ? You cannot have it both ways .. Either you are able to have reserve cash , because of previous year profits or you have incurred debt. That debt would have to come from loans some where. Those loans can be called back at anytime if the NFL could not make their payments. You cannot have a negative income all the time and be able to pay your debts. Its not like you can print paper like government.
So its one or the other. The NFL offices is profitable and able to cover their expenses or they spend more than they earn and are not financially stable.
If your household is spending more than you are making then your are in serious trouble,.
you really have no idea what you are talking about .
seriously shut up. You are making no sense.
you are wrong , the policy is wrong and that is why the congress is passing a correction to eliminate their non profit exception.
They would have never gotten that tax exemption unless congress had given it to them. They would have never qualified it under any tax law. It was an error in judgment during a time when the NFL barely made any money. Long gone are those days.
End of story