Title: PRO Sports Act
Policy area: Taxation

Summary:
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.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3830 Introduced in House (IH)]

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115th CONGRESS
  1st Session
                                H. R. 3830

      To amend the Internal Revenue Code of 1986 to exclude major 
       professional sports leagues from qualifying as tax-exempt 
                             organizations.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 26, 2017

Mr. Farenthold introduced the following bill; which was referred to the 
                      Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
      To amend the Internal Revenue Code of 1986 to exclude major 
       professional sports leagues from qualifying as tax-exempt 
                             organizations.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Properly Reducing Overexemptions for 
Sports Act'' or the ``PRO Sports Act''.

SEC. 2. FINDINGS.

    Congress makes the following findings:
            (1) The National Football League (NFL), National Hockey 
        League (NHL), PGA Tour, and Ladies Professional Golf 
        Association (LPGA) each have league offices that are registered 
        with the Internal Revenue Service as nonprofit organizations 
        under section 501(c)(6) of the Internal Revenue Code of 1986.
            (2) League-wide operations of the NFL, NHL, PGA Tour, and 
        LPGA together generate over $1 billion in annual revenue, and 
        these businesses are unmistakably organized for profit and to 
        promote their brands.
            (3) Separate from their subsidiaries, the nonprofit league 
        offices of the NFL, NHL, PGA Tour, and LPGA had annual gross 
        receipts of $326.9 million, $41.1 million, $1.5 billion, and 
        $89.1 million in 2010, respectively, for a combined total of 
        over $1.9 billion, according to each organization's publicly 
        available Form 990 filed with the Internal Revenue Service.
            (4) According to the Internal Revenue Service, section 
        501(c)(6) of the Internal Revenue Code of 1986 is for groups 
        looking to promote a ``common business interest and not to 
        engage in a regular business of a kind ordinarily carried on 
        for profit''.
            (5) According to the Internal Revenue Service, businesses 
        that conduct operations for profit on a ``cooperative basis'' 
        should not qualify for tax-exempt treatment under section 
        501(c)(6) of the Internal Revenue Code of 1986.

SEC. 3. ELIMINATION OF SPECIFIC EXEMPTION FOR PROFESSIONAL FOOTBALL 
              LEAGUES.

    (a) In General.--Paragraph (6) of section 501(c) of the Internal 
Revenue Code of 1986 is amended--
            (1) by striking ``, or professional football leagues 
        (whether or not administering a pension fund for football 
        players)''; and
            (2) by inserting ``or'' after ``real-estate boards,''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2017.

SEC. 4. SPECIAL RULES RELATING TO PROFESSIONAL SPORTS LEAGUES.

    (a) In General.--Section 501 of the Internal Revenue Code of 1986 
is amended--
            (1) by redesignating subsection (s) as subsection (t); and
            (2) by inserting after subsection (r) the following new 
        subsection:
    ``(s) Special Rules Relating to Professional Sports Leagues.--No 
organization or entity shall be treated as described in subsection 
(c)(6) if such organization or entity--
            ``(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 
        $10,000,000.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2017.
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