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Is the NFL tax-exempt? No, and the old answer was narrower than it sounded

The NFL league office gave up its federal tax exemption in 2015. The clubs were taxable even when the office held the exemption.

Georgia Hale

By Georgia Hale · Staff Writer

3 min read

No. The NFL league office is not federally tax-exempt. The league gave up its Section 501(c)(6) status in 2015 and began filing as a taxable entity for that fiscal year, according to contemporaneous reporting and a 2016 legal-sports study.

The old claim that “the NFL is tax-exempt” described a narrower arrangement. It applied to the league office, not the 32 NFL clubs.

The league office and the teams were treated differently

While the league office held its former exemption, individual NFL clubs were taxable entities and paid taxes on their shares of league earnings, according to accounts of the 2015 change.

  • League office: The entity that historically used the Section 501(c)(6) exemption.
  • Individual clubs: Taxable entities, including during the years the league office was exempt.
  • NFL Ventures: A separate partnership that a legal-sports study described as managing the league's business activities. That study said the league-office exemption did not apply to NFL Ventures.

In a 2015 statement quoted by the Tax Foundation, Commissioner Roger Goodell said income from television rights, licensing, sponsorships, ticket sales and other sources was earned by the 32 clubs and taxable there.

What Section 501(c)(6) meant

The former status was under Section 501(c)(6), a federal exemption category for business leagues. It was different from Section 501(c)(3), the charitable-organization category, according to the legal-sports study.

The IRS says professional football leagues are specifically defined as exempt organizations under Section 501(c)(6), including leagues that administer a players' pension fund. That is a description of the statutory category, not evidence that the NFL currently claims it.

Then and now

  • Before 2015: The NFL league office had a Section 501(c)(6) federal income-tax exemption. The clubs were taxable.
  • Since the 2015 change: The league office has filed as a taxable entity.

Sources in the research record trace the league's tax-exempt treatment to 1942. Professional football leagues were specifically added to Section 501(c)(6) in 1966.

The precise answer: the NFL's former federal exemption covered its league office, and that office gave it up in 2015.

Frequently asked questions

Why was the NFL previously tax-exempt?

The NFL league office historically used Section 501(c)(6), a federal exemption for business leagues. Professional football leagues were specifically included in that section. The status was different from the charitable Section 501(c)(3) exemption.

Did NFL teams pay taxes when the league office was tax-exempt?

Yes. The former exemption applied to the league office, while individual NFL clubs were taxable entities. Accounts of the 2015 change said teams paid taxes on their shares of league earnings.

Does the IRS still list professional football leagues as tax-exempt?

The IRS says Section 501(c)(6) specifically defines professional football leagues as exempt organizations under that section. That describes the statutory category, not the NFL's current filing status; the league relinquished its exemption in 2015.

Sources