Congressmen Introduce Bill To Revoke PGA Tour's Tax Exempt Status Following Saudi PIF Merger
One of the few aspects that has been made public about the proposed merger between the PGA Tour and the Saudi Arabia Public Investment Fund (PIF) is that the two sides plan on creating a yet-to-be-named for-profit entity.
This has raised red flags regarding the Tour's current non-profit tax-exempt status, and some in Congress are calling on the Tour to start paying their share.
Congressmen Vern Buchanan (R-FL) and Mike Thompson (D-CA) have introduced legislation to revoke the PGA Tour's tax-exempt status as a 501 (c)(6) nonprofit. Organizations that fall under this particular nonprofit tag do not pay federal corporate or income taxes.
“With billions of dollars in annual revenue and record profits streaming in, coupled with their looming partnership with Saudi Arabia’s sovereign wealth fund, why in the world should hardworking American taxpayers subsidize the PGA’s tax-exempt status? We should be supporting local charities on Main Street, not foreign-backed professional sports organizations that are not dedicated to benefitting the American people,” said Congressman Buchanan. “That’s why I’m pleased to introduce this legislation with Congressman Thompson to end this special-interest giveaway and require the PGA to pay taxes, just like every other American business.”
“The proposed PGA-LIV merger raises serious concerns. Nonprofit tax treatment should be reserved for institutions and charities that help everyday Americans – not billion-dollar sports leagues backed by Saudi government money,” said Congressman Thompson. “I look forward to working with my colleagues on both sides of the aisle to achieve that goal as the PGA and LIV continue their negotiations.”
The PGA Tour and its tax-exempt status has been brought to question by two congressmen. (Photo by David Cannon/Getty Images)
Congressmen Thompson and Buchanan are not the only ones to take this sort of action against the Tour and its planned merger.
In July, a month after the framework agreement between the Tour and Saudi PIF was announced, Senate Finance Committee chairman Ron Wyden (D-OR) proposed a federal bill to modify 501 (c)(6) designations.
The PGA Tour's 2022 IRS filing shows that the organization reported $1.9 billion in revenue a year ago, up from $1.59 billion in 2021. The Tour also reported $1.87 billion in costs in 2022, also a substantial uptick from the previous year.
Congressmen Thompson and Buchanan - and many others - have pointed out that the MLB voluntarily gave up their tax-exempt status in 2007 and the NFL followed suit in 2015. The NBA, NHL, and MLS do not currently claim non-profit status.
The PGA Tour and Saudi PIF have self-imposed a deadline of December 31 to agree on a merger.
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