NFL Tax-Exempt Status: A Case Study

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This paper will examine the history of the NFL’s tax-exempt status, assess the validity of this status and evaluate its effect on the league and stakeholders. The NFL’s recent decision to give up its 501(c)(6) designation and the implications of this decision will also be discussed. The NFL has a long history of lobbying the United States Congress for its benefit. The National Football League (NFL) received tax-exempt status in 1942, when the IRS accepted the league’s tax-exempt status. While there is limited information about this decision because both the IRS and NFL have lost this documentation, it is believed that the league requested tax-exempt status because it was struggling financially during World War II and finding it difficult to…show more content…
Instead of continuing their rivalry, the two leagues decided to merge in 1966. However, in order to complete the merger, the leagues would have to receive Congressional anti-trust waivers. According to the history of the United States Senate Committee on Finance, the leagues were finding it difficult to receive approval from the House Judiciary Committee Chairman, Emanuel Celler. It appears that Congressman Celler became a stronger supporter of antitrust laws after the Sports Broadcasting Act. In order to push through the approval, Commissioner Rozelle, struck a deal with the Senate Finance Committee Chairman, Russell Long. Senator Long agreed to include the merger on an existing tax bill, which would help the NFL bypass the House’s approval. In return, the new league would agree to grant the next football team to New Orleans, Louisiana, Senator Long’s home state. The NFL and AFL merger would pass easily through Senate approval as part of this tax bill. With support of Louisiana Representative Hale Boggs, the bill garnered the necessary support in the House. President Lyndon B. Johnson signed this bill into law, and section 501(c)(6) of the Internal Revenue Code now indicates the

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