On behalf of Kadish & Associates Law Group posted in Closely Held Businesses on Friday, May 8, 2015.
If you are a fan of the National Football League and a small business owner, it is probably just not about football for you. With all the offseason news regarding the schedule, the draft and even “deflate-gate” the intrigue of the NFL likely entices you. After all, the success of the NFL is unprecedented and it appears that its growth will continue.
The latest news coming out of the league’s Madison Avenue offices is that the league will drop it’s non-profit status. Essentially, the league has enjoyed 501(c)(6) status since 1942, meaning that its administrative offices in New York does not pay corporate taxes, as it fits under the rules assigned to business leagues, chambers of commerce and boards of trade. However, it is required to adhere to several disclosure rules regarding its highest paid employees.
For instance, the salaries of NFL Commissioner Roger Goodell and several of his top executives were public domain, along with the income of the league office. The commissioner and the league have taken a great deal of criticism over the years given the explosion in profits for the league. One common question is why the league office isn’t paying taxes given how much revenue and profits it enjoys.
This question is one the “distractions” that the league ostensibly wants to avoid.
The league’s story is an example of what businesses can do to resolve public relations problems relating to the income of a non-profit. However, giving up tax exempt status may not be appropriate for every qualifying business. To learn more about how it may affect your business, an experienced attorney can help.