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As far as income taxes that's true. However the NFL's current nonprofit status means it avoids taxes that most other entities (individuals or businesses) would

As far as income taxes that's true. However the NFL's current nonprofit status means it avoids taxes that most other entities (individuals or businesses) would have to pay even if not profitable, such as sales tax. Many (most?) states allow nonprofits to show a tax-exempt ID number at places like Wal-Mart or at hotels, and have sales, occupancy, and other taxes removed. The motivation, I believe, was to provide in effect a subsidy to the work of organizations like the Red Cross, by reducing their expenses. That can be solved at the state level, however. The states do not have to defer to the federal government's classification of 501(c) tax-exempt organizations when choosing who to exempt from state taxes. They could adopt a more stringent state-level definition. Or they could still defer to the federal categories, but a more restrictive subset. For example, a state could limit tax exemptions to 501(c)(3) charities (which have more stringent requirements), and not exempt 501(c)(6) organizations like the NFL. (Considering what kind of stuff slips into 501(c)(6), this is probably a good idea beyond just the NFL case.)

maratd 13y ago
> Many (most?) states allow nonprofits to show a tax-exempt ID number at places like Wal-Mart or at hotels, and have sales, occupancy, and other taxes removed. They also allow any business to do the same, as long as whatever is purchased is sold to another party as a part of doing business. So a computer tech shop, for example, would never pay for any parts it purchases at the store that are then included in a system it sells.
- _delirium 13y ago
  Under a VAT system, that's true across the board. But under the U.S. sales-tax system nonprofits have blanket exemption, while businesses generally don't. Services such as hotels used in business travel, for example, are generally not exempt, so the NFL would pay occupancy tax if it were not a 501(c)(6) organization (or a state chose not to recognize that exemption). And whether purchase of goods is exempt depends on the state and the specific kind of good; most provide very specific lists of exempted "machinery and equipment" that fall far short of everything. For example, here are California's rules: http://www.boe.ca.gov/sutax/faq426.htm#1 http://www.boe.ca.gov/sutax/faq426.htm#1
maxerickson 13y ago
Yeah, I had not realized that states and municipalities were granting exemptions just based on federal tax status. I wonder how much of their expense is salary (taxed) and "home office" (where the locality has plenty of opportunity to consider the exception and deal with it as they see fit).
res0nat0r 13y ago
The NFL being a non-profit and bilking money from the USA seems to be a weekly meme on Reddit lately. Each team is it's own entity and pays taxes. Roger Goodell pays taxes on all of his salary. The umbrella corp that is the NFL is a non-profit, they are more like a Chamber of Commerce to promote NFL business. Debunking of this oft repeated incorrect meme in top comments here: http://www.reddit.com/r/politics/comments/1wk64y/senators_try_to_sack_nfls_nonprofit_status/ http://www.reddit.com/r/politics/comments/1wk64y/senators_tr...
- _delirium 13y ago
  You don't seem to have succeeded in debunking anything relevant to this post. This post is simply pointing out that, in part because the Super Bowl is organized by a nonprofit that is exempt from taxes on its local economic activity (purchases, hotel usage, etc.), its benefit to the city/region hosting the Super Bowl is quite limited. For example, it may generate more hotel usage, but it may also displace some tax-paying hotel usage with non-tax-paying hotel usage, which cancels out some of that added activity. But more generally, the Super Bowl, a for-profit activity mainly aiming to enrich the teams who are NFL members, has structured much of its activity such that the NFL itself, a nonprofit organization, is doing all the organization and purchasing, thereby exempting most of the local economic activity from sales taxes, hotel occupancy taxes, and similar. A proper arrangement would be that the for-profit corporations profiting from the Super Bowl should be organizing it, rather than laundering their signature product through a nonprofit organization. I can't think of another case where a group of companies' main product is run by an umbrella nonprofit. Chamber-of-commerce organizations usually do pretty minor coordinating and lobbying activity, not actual production operations. To get something analogous in tech you'd have to imagine something silly like all the cloud-computing companies getting together and setting up a Cloud Services Association, a 501(c)(6) nonprofit that operates all their datacenters jointly, rather than e.g. Amazon or Microsoft operating their own datacenters on a for-profit basis.
  - res0nat0r 13y ago
    Not sure what this is trying to state, but most seem to think that because the word "non profit" is there, it means they should be broke, operating on a shoestring budget, be poor unknown non-profit corps dedicated to human interest campaigns, but this isn't the case. Feel free to read the multiple thread top comments on the various times on /r/politics this topic has been brought up. Also the NFL filing signed by Goodell last year operated at a loss.

maratd 13y ago

> Many (most?) states allow nonprofits to show a tax-exempt ID number at places like Wal-Mart or at hotels, and have sales, occupancy, and other taxes removed. They also allow any business to do the same, as long as whatever is purchased is sold to another party as a part of doing business. So a computer tech shop, for example, would never pay for any parts it purchases at the store that are then included in a system it sells.

_delirium 13y ago
Under a VAT system, that's true across the board. But under the U.S. sales-tax system nonprofits have blanket exemption, while businesses generally don't. Services such as hotels used in business travel, for example, are generally not exempt, so the NFL would pay occupancy tax if it were not a 501(c)(6) organization (or a state chose not to recognize that exemption). And whether purchase of goods is exempt depends on the state and the specific kind of good; most provide very specific lists of exempted "machinery and equipment" that fall far short of everything. For example, here are California's rules: http://www.boe.ca.gov/sutax/faq426.htm#1 http://www.boe.ca.gov/sutax/faq426.htm#1

maxerickson 13y ago

Yeah, I had not realized that states and municipalities were granting exemptions just based on federal tax status. I wonder how much of their expense is salary (taxed) and "home office" (where the locality has plenty of opportunity to consider the exception and deal with it as they see fit).

res0nat0r 13y ago

The NFL being a non-profit and bilking money from the USA seems to be a weekly meme on Reddit lately. Each team is it's own entity and pays taxes. Roger Goodell pays taxes on all of his salary. The umbrella corp that is the NFL is a non-profit, they are more like a Chamber of Commerce to promote NFL business. Debunking of this oft repeated incorrect meme in top comments here: http://www.reddit.com/r/politics/comments/1wk64y/senators_try_to_sack_nfls_nonprofit_status/ http://www.reddit.com/r/politics/comments/1wk64y/senators_tr...

_delirium 13y ago
You don't seem to have succeeded in debunking anything relevant to this post. This post is simply pointing out that, in part because the Super Bowl is organized by a nonprofit that is exempt from taxes on its local economic activity (purchases, hotel usage, etc.), its benefit to the city/region hosting the Super Bowl is quite limited. For example, it may generate more hotel usage, but it may also displace some tax-paying hotel usage with non-tax-paying hotel usage, which cancels out some of that added activity. But more generally, the Super Bowl, a for-profit activity mainly aiming to enrich the teams who are NFL members, has structured much of its activity such that the NFL itself, a nonprofit organization, is doing all the organization and purchasing, thereby exempting most of the local economic activity from sales taxes, hotel occupancy taxes, and similar. A proper arrangement would be that the for-profit corporations profiting from the Super Bowl should be organizing it, rather than laundering their signature product through a nonprofit organization. I can't think of another case where a group of companies' main product is run by an umbrella nonprofit. Chamber-of-commerce organizations usually do pretty minor coordinating and lobbying activity, not actual production operations. To get something analogous in tech you'd have to imagine something silly like all the cloud-computing companies getting together and setting up a Cloud Services Association, a 501(c)(6) nonprofit that operates all their datacenters jointly, rather than e.g. Amazon or Microsoft operating their own datacenters on a for-profit basis.
- res0nat0r 13y ago
  Not sure what this is trying to state, but most seem to think that because the word "non profit" is there, it means they should be broke, operating on a shoestring budget, be poor unknown non-profit corps dedicated to human interest campaigns, but this isn't the case. Feel free to read the multiple thread top comments on the various times on /r/politics this topic has been brought up. Also the NFL filing signed by Goodell last year operated at a loss.