Taking a Knee: An Analysis of the NFL’s Decision to Relinquish Its § 501(c)(6) Federal Tax Exemption
AbstractAfter 50 years as a nonprofit entity, the National Football League (NFL) voluntarily relinquished its favorable tax exemption. The NFL was exempt from paying federal income taxes due to its classification as a nonprofit organization according to Internal Revenue Code (IRC) Section (§) 501(c)(6). This rule provides a tax exemption to organizations performing operations that further the industry or profession they represent. While professional football leagues are explicitly stated in §501(c)(6), the NFL’s exemption only applied to its League Office opposed to the NFL Ventures partnership, which manages the league’s business activities. As such, the NFL may have erred on deciding to forfeit their exemption. The purpose of this study is to review §501(c)(6) to determine if the League Office should maintain its exemption. The analysis shows the League Office cannot be considered an industry association due to the performance of particular activities for the benefit of its individual members.