Senators throw Hail Mary at NFL

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The National Football League might be reeling right now, but lawmakers seeking to strip the league of its tax-exempt status face a tough fight.

Senate Majority Leader Harry Reid (D-Nev.), who has long been angered by the Washington Redskins team name, is among the lawmakers targeting the NFL as the league tries to recover from its handling of a recent rash of domestic violence and child abuse incidents.

{mosads}Reid’s teamed up with Sens. Maria Cantwell (D-Wash.) and Tim Johnson (D-S.D.) to propose taking away the NFL’s tax exemption, for as long as it promotes the Redskins name.

Sen. Cory Booker (D-N.J.), himself a former Stanford football player, has a proposal that would scrap the exemption for all professional leagues, and send the proceeds to domestic violence prevention programs.

But lawmakers who have long battled the tax exemption don’t see any reason to believe Congress will act soon.

“It think it’s posturing,” Sen. Tom Coburn (R-Okla.), who has long led the fight against the NFL’s tax-exemption, said about the new bills from his colleagues. “You see the NFL’s getting some negative deal, and now you jump on a bill?”

The arrest of Minnesota Vikings running back Adrian Peterson and a video showing former Baltimore Ravens player Ray Rice hitting his now-wife sparked the recent furor on Capitol Hill.

But Congress has also now skipped town for the next six weeks or so, and it’s far from guaranteed that an NFL bill would get considered in the lame-duck session after November’s election. A spokesman for Reid said it was too soon to predict how the post-election session would play out.

On top of that, some lawmakers either believe it’s too soon for Congress to weigh in on the league’s tax break, or that there are more important issues to address. Still others think Congress should probably avoid the matter entirely.

“I’m willing to look at it. But frankly, I don’t think we should take it away. It’s a great institution in spite of the bad apples,” Sen. Orrin Hatch (Utah), the top GOP tax writer in the Senate, said about the league.

At issue is the tax code’s take that the main office of the NFL and other sports leagues, like the National Hockey League and the Professional Golfers Association, is a trade association. Some leagues, like the National Basketball Association and Major League Baseball, have given up the exemption.

The teams themselves — like the Redskins — aren’t tax-exempt, and the NFL league office often operates at a loss. That means the tax exemption for the sports leagues is a tiny part of the tax code, costing in the range of $100 million over a decade.

In fact, as the liberal group Citizens for Tax Justice argued this week, the federal tax exemption amounts to just a fraction of the public money that state and local governments often give to professional sports teams to help build stadiums.

But the NFL league office also pays the salary of its commissioner, Roger Goodell, who made an estimated $44 million last year, and several other seven-figure salaries.

That’s piqued the interest of lawmakers who have criticized Goodell’s handling of the Rice situation. Goodell himself said Friday in a news conference that he managed that situation poorly, but added that he never considered resigning.

House Ways and Means Chairman Dave Camp (R-Mich.) proposed getting rid of the sports league’s tax exemptions as part of his broader tax reform draft this year. But that plan has gained little traction on Capitol Hill.

In the Senate, Finance Chairman Ron Wyden (D-Ore.) said this week that he’d been too preoccupied with the conflict in Syria and inversions — the current hot topic in tax circles — to consider the NFL.

“I’m aware of various bills that have been introduced,” Wyden told reporters this week. “I’m going to have to have some time to look at them.”

Sen. Angus King (I-Maine) joined Coburn’s bill to get rid of the tax exemptions months ago. But the Oklahoma Republican said that other senators still weren’t rushing to co-sponsor the measure, and insisted the issue was broader than just punishing the NFL for its recent missteps.

“Everybody’s picking on the NFL right now,” Coburn said, noting that the PGA has a more expensive exemption. “None of them should be getting this tax-exempt status.”

The NFL appears to have no interest in giving up its tax exemption, and has no shortage of lobbying might to get that point across. This week, the league hired Cynthia Hogan, a former aide to Vice President Biden who helped write the Violence Against Women Act, to head up its operation in Washington.

Lawmakers this week also suggested that the NFL’s sponsors and fans were better positioned to pressure the league to make changes. Most women senators have urged Goodell to take a harder line against domestic violence.

In addition to the tax exemption, Congress oversees the NFL’s antitrust exemption as well.

Rep. Bill Pascrell (D-N.J.) said that Congress would have always had a tough time getting to the NFL these past two weeks, given lawmakers’ long to-do list.

But Pascrell also warned against rushing to discipline the league legislatively, saying lawmakers should wait until they have a better understanding of how widespread the recent problems are.

“I think this would be the worst time to look at it right now,” said Pascrell, a Ways and Means member. “The issue of abusing members of your families – it’s a very serious issue. But the issue of hanging a tax thing over the NFL right now? To me, you have to get in line.”

Hatch saw it the same way.

“I have a lot of confidence in Goodell. He’s a tough guy, a smart guy,” the Utah Republican said. “They’ll come up with a way of resolving these problems.”

Tags Adrian Peterson Baltimore Ravens Dave Camp Harry Reid National Football League NHL Orrin Hatch PGA of America Ray Rice Roger Goodell Ron Wyden Sports Tom Coburn Washington Redskins

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