NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A5137A
SPONSOR: Glick (MS) TITLE OF BILL:
An act to amend the tax law, in relation to imposing franchise taxes on
professional football leagues
PURPOSE OR GENERAL IDEA OF BILL:
To recognize professional football leagues as for-profit businesses in
the State of New York, notwithstanding their designation in federal law
as not-for-profit 501(c)(6) entities.
SUMMARY OF SPECIFIC PROVISIONS:
Section 1 of the bill amends section 209 of the tax to specify that
professional football leagues, as that term is defined in 26 U.S.C.
Section 501 of federal tax law, shall not be considered nonprofit organ-
izations for the purposes of New York State tax laws.
Section 2 of the bill is the effective date.
JUSTIFICATION:
In 1966, a loophole was created in the federal tax code classifying
"professional football leagues" as tax-exempt 501(c)(6) organizations, a
designation otherwise reserved for trade organizations like chambers of
commerce.
One such professional football league, the National Football League
(NFL), has annual revenues approaching $10 billion, a figure that is
projected to climb over the next decade. Meanwhile, New York State
taxpayers are helping to underwrite the exorbitant salaries of the NFL's
executives, including the $44 million salary of its CEO in 2013.
Other major professional sports leagues headquartered in New York State
are taxed as for-profit entities, including the National Basketball
Association and Major League Baseball. Professional football leagues,
including the NFL, should be subject to the same requirements.
PRIOR LEGISLATIVE HISTORY:
New bill.
FISCAL IMPLICATIONS:
An increase in state revenues generated through the franchise tax.
EFFECTIVE DATE:
This act shall take effect January 1, 2017 and shall apply to all tax
years commencing on or after such date.
STATE OF NEW YORK
________________________________________________________________________
5137--A
2015-2016 Regular Sessions
IN ASSEMBLY
February 12, 2015
___________
Introduced by M. of A. GLICK, JAFFEE, O'DONNELL, RIVERA, COOK, SKOUFIS,
ZEBROWSKI, TITONE, MILLER, BARRON, BARRETT, ARROYO, ROSENTHAL,
LINARES, CRESPO, GALEF, GOTTFRIED, MURRAY, STECK, ABINANTI, FAHY,
MARKEY -- Multi-Sponsored by -- M. of A. BLAKE, BRENNAN, COLTON,
LUPARDO, McLAUGHLIN, MONTESANO, PERRY, ROBINSON, SIMON -- read once
and referred to the Committee on Ways and Means -- recommitted to the
Committee on Ways and Means in accordance with Assembly Rule 3, sec. 2
-- committee discharged, bill amended, ordered reprinted as amended
and recommitted to said committee
AN ACT to amend the tax law, in relation to imposing franchise taxes on
professional football leagues
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Section 209 of the tax law is amended by adding a new
2 subdivision 13 to read as follows:
3 13. For any taxable year beginning on or after January first, two
4 thousand seventeen, professional football leagues, as defined in 26
5 U.S.C § 501 shall not be considered to be nonprofit organizations for
6 the purposes of this chapter and shall be subject to the taxes imposed
7 by this article.
8 § 2. This act shall take effect January 1, 2017 and shall apply to all
9 tax years commencing on or after such date.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD07760-03-6
