One of the many questions that arose from the stunning merger of the PGA Tour and LIV Golf, an enterprise of Saudi Arabia’s sovereign wealth fund, is why the professional golf league has a federal tax exemption.
The tour is exempt under a section of the IRS Code that applies to “business leagues, chambers of commerce, real-estate boards, boards of trade, or professional football leagues … not organized for profit and no part of the net earnings of which inures to the benefit of any private shareholder or individual.”
The notion that the PGA Tour is not engaged in a profit-generating enterprise is ridiculous, as evidenced by Commissioner Jay Monahan’s
$8 million-plus salary. It’s all the more so given the merger, which will create an umbrella for-profit entity while the PGA remains a nonprofit, and an outlier.
The NFL’s political clout is such that the IRS Code specifically exempts it. But under public pressure, it gave up its exemption in 2015, as Major League Baseball did in 2007. The National Basketball Association and Major League Soccer never have been exempt.
Soon after the PGA-LIV announcement, Democratic U.S. Rep. John Garamendi of California introduced the “No Corporate Tax Exemption for Professional Sports Act.” It would preclude “a professional sports league, organization, or association, a substantial activity of which is to foster national or international professional sports competitions …” from gaining a federal tax exemption.
The Saudis invested $2 billion in LIV and likely will pump even more into the PGA Tour. They don’t need taxpayers to caddy for them. It’s time to end the exemption.
— Tribune News Service
