First Bill Introduced to Strip PGA of 501(c)(6) Status
PGA continues to take a public relations beating for its perceived capitulation to LIV Golf and its backer, the Saudi Public Investment Fund. Yesterday, only one day after the PGA and LIV Golf announced its plans to partner up, a California democrat introduced the “No Corporate Tax Exemption for Professional Sports Act.” Here is the press release:
Today, Congressman John Garamendi (D-CA08) introduced the “No Corporate Tax Exemption for Professional Sports Act” following the Saudi Sovereign Wealth Fund’s surprise takeover of the Professional Golfers’ Association of America (PGA) Tour.
The legislation would end the tax loophole that the PGA Tour and other professional sports leagues exploit to avoid paying any federal corporate income tax. These professional sports leagues each generate more than $100 million annually in corporate income, which would be taxable under the Garamendi bill. In 2015, the National Football League voluntarily stopped claiming exemption from the federal corporate income tax under an exemption originally intended only for amateur sports.
“Saudi Arabia cannot be allowed to sports wash 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 by allowing the sovereign wealth fund of a foreign government with an unconscionable human rights record to take over an iconic American sports league and avoid paying a penny in federal corporate income tax. This merger flies in the face of the PGA players who turned down hundred-million-dollar paydays from the Saudi-backed LIV to align themselves with the right side of history and human decency.
“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. My commonsense legislation would right this wrong and bring some much-needed accountability to this matter,” Garamendi concluded.
The bill is likely a harbinger of things to come for PGA, especially in light of past efforts to revoke tax exemptions for professional sports associations, and the characterization of the joint venture as Saudi Arabian sportswashing, a process whereby a pariah sponsors a beloved event or team to cleanse itself of its pariah status. Already 9/11 families and even PGA golfers who were loyal to PGA — foregoing millions just to show up and hit a few balls — as it engaged in anti-competitive behavior (proving it does not deserve tax exemption as a business league) are condemning the PGA. We can expect co-sponsors from both sides of the isle when the bill is really introduced.
darryll jones