Coburn Bill Would End Some Tax-Exempt Statuses
PGA Tour could lose its tax-exempt status in Sen. Coburn bill
BY Ryan Ballengee on September, 23 2013
Former PGA Tour commissioner Deane Beman made a genius decision that would forever change the landscape of professional golf when he converted the PGA Tour into a 501(c)6 non-profit organization.
However, if a new Senate bill from Senator Tom Coburn (R-OK) eventually becomes law, that designation will no longer shield the PGA Tour from corporate taxes.
The Coburn bill, S.1524, would deny 501(c)6 status to professional sports leagues whose revenue exceeds $10 million. The main target of the proposed change to the tax code is the National Football League, but if the bill is signed into law, the PGA Tour would be among those sports leagues suddenly subject to the federal 35 percent corporate tax rate.
A scoring of the legislation suggests the 501(c)6 distinction is worth about $10 million to major sports leagues.
Coburn’s Senate office says these leagues do not promote “the success of their respective sports—football, ice hockey, and professional golf—but these leagues are clearly organized for profit to promote their specific brands.” To qualify as a 501(c)6, these organizations must claim they are essentially a trade organization, looking to promote their sport at large, not just their respective brands.