Congress Tees Up New Bill Stripping PGA Tour’s Tax-Exempt Status
Barely a day after the PGA Tour shocked the world by announcing it would be joining a for-profit venture with its heretofore hated rival—the Saudi-backed LIV Golf—a Congressional bill has been introduced to strip the tour of its tax-exempt status.
On Wednesday afternoon, Rep. John Garamendi (D-Calif.), the third-ranking minority member on the House Armed Services Committee, proposed the “No Corporate Tax Exemption for Professional Sports Act,” which would end the PGA Tour’s ability to file as an IRS 501-C organization, as it has done for decades.
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As Sportico noted in a story published earlier Wednesday, the PGA Tour is one of the last major American pro sports organizations to continue operating as a federal nonprofit, after the NFL voluntarily converted to for-profit status in 2015.
Over the last 15 years, there have been several bills proposed, mostly by Republicans, that would change the Internal Revenue Code to disallow pro sports organizations earning more than $10 million in annual revenue from availing themselves of tax-exempt status.
In a statement to Sportico, Garamendi couched his rationale for the legislation in geopolitical terms.
“Saudi Arabia cannot be allowed to sportswash its government’s horrific human rights abuses and the 2018 murder of American-based journalist Jamal Khashoggi by taking over the PGA,” Garamendi said. “PGA Tour Commissioner Jay Monahan should be ashamed of the blatant hypocrisy and about-face he and the rest of PGA’s leadership demonstrated.”
Garamendi, a former college football player and wrestler at Cal, has been a member of Congress since 2009. He previously served as the lieutenant governor of California.
“The notion that the Saudi Sovereign Wealth Fund would pay zero dollars in taxes on their blood money and potentially billions of dollars in profits while countless American families pay their fair share while struggling to make ends meet is ludicrous,” Garamendi said. “My common-sense legislation would right this wrong and bring some much-needed accountability to this matter.”
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