As if it's not already official, the impeding creation of Mega-Leagues clinches the title of this thread. The question is, will anyone in Congress dare challenge the Sacred Cow (and Cash Cow) that is the 100% tax exemption of revenue generated by Big Time college athletics?
(09-19-2011 01:15 PM)Okie Chippewa Wrote: [ -> ]As if it's not already official, the impeding creation of Mega-Leagues clinches the title of this thread. The question is, will anyone in Congress dare challenge the Sacred Cow (and Cash Cow) that is the 100% tax exemption of revenue generated by Big Time college athletics?
Short answer... Yes there will be some congress critter who will, if pushed far enough, make a lot of noise about the tax exempt status..
Tax exempt status isn't in as much danger as you would think. I read the congressional report on it and in that report it talked about how difficult it is to strip tax exempt status especially if they are not competing with anybody (up until this point the NFL likes college as it is so unless that changes I don't see anybody coming forward and saying that college football is getting an unfair advantage over their business). The kind of tax that is leveled on institutions like this are based on profits and on the business's competition. No competition no tax (generally). The law was originally made in reference to a campus restaurant. The government thought that it was unfair to run this restaurant (that was competing with other profit based restaurants) without tax while others did. So they created that tax system.
In this report it also talked about that even if they did level a tax that it would not make as much as you would think as it is easy to remove profit. Fort instance if they start paying players that will eat into profit as will spending money on coaches and new equipment. They just won't be able to sit on the money anymore (and it may harm getting money into the general fund which means we would only be hurting the educational side and not the athletic side). Example Kent State registered $0 profit last year. That means we would have paid no tax.
I'm surprised they haven't started renaming the conferences after corporate sponsors.
Here's a different perspective. Rather than focusing upon tax exemptions (for the athletic departments), how about the tax deductions (from the contributors)? Let's say $500 million was raised by various institutions to build Holidomes-on-steroids so the football players don't have to practice outdoors (yikes!). Using a 30% tax-deduction (as a round number), that's $150 million spent on extravagance rather than something more important, like repairing crumbling bridges.
Who needs bridges? The football team can just fly to their game. And that's all that matters.
(09-19-2011 05:10 PM)Okie Chippewa Wrote: [ -> ]Here's a different perspective. Rather than focusing upon tax exemptions (for the athletic departments), how about the tax deductions (from the contributors)? Let's say $500 million was raised by various institutions to build Holidomes-on-steroids so the football players don't have to practice outdoors (yikes!). Using a 30% tax-deduction (as a round number), that's $150 million spent on extravagance rather than something more important, like repairing crumbling bridges.
If you are new to the country, in America you're allowed to spend money on whatever you want. Its a competitive marketplace for contributions.
You can give that money to the state and claim a deduction for road repairs but what if you don't care? Welcome to an open society.
(09-19-2011 01:26 PM)Bull_In_Exile Wrote: [ -> ] (09-19-2011 01:15 PM)Okie Chippewa Wrote: [ -> ]As if it's not already official, the impeding creation of Mega-Leagues clinches the title of this thread. The question is, will anyone in Congress dare challenge the Sacred Cow (and Cash Cow) that is the 100% tax exemption of revenue generated by Big Time college athletics?
Short answer... Yes there will be some congress critter who will, if pushed far enough, make a lot of noise about the tax exempt status..
Its not Congress decision, its a court decision.
The football programs use "Student Athletes" which are part of the educational mission of developing minds and bodies of students. Revenue received via TV deals or tickets is considered service revenue.
Its no different if from having your church charge money for a performance of a Christmas Carol legally.
There is a movement to force universities and hospitals to accept payments in lieu of taxes by municipalities. Tax exempt entities own so much property in some cases that its running city governments into the poorhouse.