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New Senate bill would cost the PGA Tour millions in new taxes

By Luke Kerr-Dineen

Senator Tom Coburn (R-OK), is known as a Tea Party favorite who isn't afraid to go after anyone, but now he's turning his attention to professional sports -- and it could cost the PGA Tour millions in new taxes.

blog-coburn-480.pngThe PGA Tour and LPGA Tour, like its fellow U.S.-based sports leagues, are classified under the law as a 501(c)(6) organization -- a tax-exempt status granted to Business Leagues, Chamber of Commerces and Real Estate Boards.
Coburn's bill, the PRO Sports Act (S. 1524) would exclude major sports leagues from receiving tax-exempt status and force the PGA Tour, which generated more than $972 million in revenue in 2011 according to its most recent tax filings, to pay the corporate tax rate of 35 percent. Coburn's office estimates the bill would generate $109 million in the next ten years.
"Working Americans are paying artificially high rates in order to subsidize special breaks for sports leagues," Coburn said in a release. "This would help give all Americans, not just athletes and owners, a break and pave the way for the kind of tax reform and job creation our economy desperately needs."

PGA Tour Communications Officer Ty Votaw said the Tour "is not interested in communicating with elected officials through the media," but did confirm they continue to work with other sports leagues on this and similar issues before issuing Golf Digest the following statement: 

As a 501(c)(6) membership organization that co-sanctions more than 100 tournaments on five professional golf tours, the PGA TOUR directs all net revenue either to benefit our members or charity. Players are compensated through tournament purses and performance-based retirement plans. While our tax exempt status does not require or depend on charitable activities in any way, giving back is a fundamental part of what we do. 

The vast majority of PGA TOUR co-sanctioned tournaments are organized for a charitable purpose, and all tournaments have a charitable focus with net proceeds being contributed directly to worthy causes in the communities where they are held. In 2012 alone, tournaments generated more than $130 million for over 3,000 charities across the United States, bringing our all-time total to $1.86 billion. This level of charitable giving is unprecedented in professional sports.