Why is the NFL a non-profit organization despite having an annual revenue of $9.5 billion?
Technically, the National Football League does pay taxes through NFL Properties and NFL Ventures, but the league office is tax-exempt since 1942.
Back then, the IRS ruled that the NFL was a trade association and a non-profit, which exempts it from having to pay taxes under section 501(c)6 of the tax code.
The league’s non-profit status was further enshrined when the NFL and AFL merged in 1966.
Due to anti-trust laws, the merger wasn’t possible without Congress getting involved. However, Congress eventually published Public Law 89-800 on November 8, 1966, allowing the NFL and AFL to merge.
Two Louisiana politicians, Senator Russell Long and Representative Hale Boggs, were responsible for pushing through the legislation, and the NFL has remained a non-profit, tax-exempt entity till this day.
Recently, however, two senators, Sen. Cory Booker from New Jersey and Sen. Maria Cantwell from Washington, are lobbying to end NFL head office from operating as a non-profit organization.
After Baltimore Ravens’ Ray Rice domestic violence case, Sen. Cory Booker is looking to push through a bill to fund domestic violence prevention programs by closing a tax loophole in a couple of professional sports leagues, of which the NFL is one.
Sen. Cantwell’s drive to end the NFL’s non-profit status is liked to getting the Washington NFL franchise to change its name, which is a racist slur against Native Americans.