WASHINGTON – Congressmen Vern Buchanan (R-FL) and Mike Thompson (D-CA) introduced legislation to revoke the PGA Tour’s tax-exempt status. Under current law, the PGA is a 501(c)(6) nonprofit organization, meaning it pays no federal corporate income taxes. The legislation follows the PGA’s decision to merge with Saudi-backed LIV Golf into a single for-profit entity.
“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.”
In June of 2023, a deal was announced to merge the PGA Tour and LIV Golf. The proposed deal would have the Saudi Public Investment Fund (PIF) contribute “its golf-related commercial business and rights (including LIV Golf), along with a significant financial investment, toward minority equity ownership of a new, collectively held, for-profit LLC.” In the months since, few details of the agreement have been made public.
According to Golfweek, “The PGA Tour reported $1.9 billion in revenue in 2022, up from $1.59 billion in 2021.” The legislation introduced by Buchanan and Thompson specifically applies to sports leagues with annual gross receipts exceeding $1 billion during any of the preceding five tax years.
Most American professional sports organizations have voluntarily given up their tax-exempt status. In fact, Major League Baseball did so in 2007 and the National Football League followed suit in 2015. The National Basketball Association, National Hockey League and Major League Soccer do not currently claim non-profit status.
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