skip to main content

H.R. 296 (115th): PRO Sports Act

In wake of national anthem protests, PRO Sports Act would end professional sports leagues' tax-exempt status

President Trump called for the NFL's "tax breaks" to end after many players and teams have knelt during the national anthem this season. While the NFL is not tax-exempt, several other professional sports leagues are, an issue that has drawn unprecedented attention in recent weeks.

The PRO Sports Act would eliminate tax exemptions for professional sports leagues.


In a September speech, Trump called for players who protest during the national anthem before sports games to be fired.

"Wouldn't you love to see one of these NFL owners, when somebody disrespects our flag, to say, 'Get that son of a bitch off the field right now. Out! He's fired. He's fired!'" Trump said at an Alabama rally to applause.

A few players had begun sitting, kneeling, or locking arms during the anthem to protest police brutality against people of color, beginning in the 2016 season before Trump was president. But the practice escalated sharply in the past month since Trump's speech, with even many uncontroversial players and teams taking up the practice.

Vice President Mike Pence even left an Indianapolis Colts game after a number of players refused to stand for the anthem, with Pence departing the stadium before the game even began. (At a taxpayer cost of about $242,500.)

What the bill does

The PRO Sports Act, short for the Properly Reducing Overexemptions for Sports Act, would amend the tax code to prevent professional sports leagues from holding so-called 501(c)(6) tax-exempt status.

The bill would apply to all professional sports leagues, but not the NFL because it's not tax-exempt, although the issue has only gained traction after Trump's comments about the NFL specifically.

An exemption would be granted to any very small professional sports leagues with revenues below $10 million, such as the Professional Disc Golf Assocation for example. By comparison, the NFL will earn about $14 billion this year.

Due to a procedural quirk, two identical versions of the legislation have been introduced.

H.R. 296 was introduced back in January by former Rep. Jason Chaffetz (R-UT3), who resigned in June to become a paid regular contributor to Fox News. Since then, Rep. Matt Gaetz (R-FL1) signed on to become the lead sponsor instead. Interestingly, Gaetz was not one of the original cosponsors of the legislation.

A duplicate bill H.R. 3830 was also subsequently introduced in September by Rep Blake Farenthold (R-TX27).

The NFL is not tax exempt

The NFL's tax-exempt status had historically only applied to its central office and not its 32 teams, even though the teams account for the vast majority of the umbrella organization's revenues. Even then, the NFL's central office itself actually voluntarily gave up its nonprofit tax-exempt status in 2015 after calling the issue a "distraction." (More at Snopes.)

In other words, since 2015 -- before either Trump's comments or Colin Kaepernick's kneeling in 2016 -- the NFL has not been tax-exempt. The White House, recognizing this, appeared to walk back Trump's comment later:

"I think he's just making the point that if these individuals are going to be supported in large part and subsidized by taxpayers, that a large percentage and majority of Americans have said that they want NFL players to stand," White House Press Secretary Sarah Huckabee Sanders said. "The federal tax law doesn't apply here, but certainly we know that they receive tax subsidies on a variety of different levels.

Still, the league acknowledges almost all their potentially-taxable revenues as business expenses, in ways that the government could potentially change.

For example, in June GovTrack Insider covered the Eliminating Taxpayer Subsidies for Stadiums Act, which would discontinue taxpayer funding for athletics arenas.

What supporters say

Supporters argue the PRO Sports Act prevents money from going to players or owners who have drawn conservative wrath recently.

"Nowhere in the Constitution does it say that Americans are required to subsidize disrespect for America, or to have their tax dollars wasted on corporate welfare to sports teams," House sponsor Gaetz said in a press release.

"We must close this loophole in the tax code, and end taxpayer subsidies for professional athletics. If players want to protest, they have that right --- but they should do it on their own time, and on their own dime."

Trump also tweeted his support: "Why is the NFL getting massive tax breaks while at the same time disrespecting our Anthem, Flag and Country? Change tax law!"

GovTrack Insider was unable to locate any outright statements of opposition, likely because politicians recognize the bad optics of defending such hated "corporate welfare," especially when it's for an organization primarily based in entertainment rather than primarily charitable.

Odds of passage

Original version H.R. 296 attracted two House cosponsors, both Republicans. Newer version H.R. 3830 has yet to attract any cosponsors. Both await a vote in the House Ways and Means Committee.

Two previous versions introduced by Chaffetz in 2015 and 2014 never received votes in the House. The 2014 version was also introduced in the Senate by former Sen. Tom Coburn (R-OK), but Coburn retired that year and no subsequent version of the House bill -- including 2017's -- has been introduced in the Senate.

Lest you think Chaffetz just didn't like sports or football, quite the opposite: he was the starting kicker for the BYU football team in 1988 and 1989. (His career conversion percentage was a subpar 64 percent, which would put him in the bottom quarter among Division 1 kickers this season.)

Last updated Oct 18, 2017. View all GovTrack summaries.

The summary below was written by the Congressional Research Service, which is a nonpartisan division of the Library of Congress, and was published on Jan 5, 2017.

Properly Reducing Overexemptions for Sports Act or the PRO Sports Act

This bill amends the Internal Revenue Code to remove professional football leagues from the list of tax-exempt organizations.

No organization or entity shall be treated as tax-exempt if it: (1) is a professional sports league, organization, or association, a substantial activity of which is to foster national or international professional sports competitions (including by managing league business affairs, officiating or providing referees, coordinating schedules, managing sponsorships or broadcast sales, operating loan programs for competition facilities, or overseeing player conduct); and (2) has annual gross receipts in excess of $10 million.