April 15 may not be the opposite of Christmas Day (technically, I guess that would be Good Friday?); but, the annual deadline for paying one of Ben Franklin's two absolute debts, the deadline-day of tax season, certainly has a feeling far-afield from the 'tis better to give than to receive sentiment of the Holiday season.
Sport(s) and taxes; a few examples of taxes related to sports:
The Amusement Tax: Last year I played golf with my dad at a nearby golf course. Dad treated. On the way to the first tee he handed me the receipt to see if I noticed anything strange. The course has seen better days. The scene was like a racially dyslexic spoof on an old In Living Color skit where a Jamaican family owned and operated a commercial airline; with the owner standing-in as the club pro, clubhouse attendant, cashier, snack-bar attendant, starter and cart staff of one. He had rung us up for something along the lines of (i) three buckets of range balls, at the member rate, and (ii) two weekday greens fees, also at the member rate. This would not have been at all strange if (i) either of us hit a single range ball, (ii) either of us were members of the course, and (iii) it weren't a Sunday. There is an Amusement Tax assessed on the rental of golf carts, which it would appear the owner had lost interest in paying.
Per-State Income Tax on Professional Athletes: You can add the complication of having to calculate tax obligations based-upon the number of service days spent playing in various states to the list of potential pitfalls faced by professional athletes. Maybe not financially crippling in the same way as making it rain in the (gentlemen's) club, or paying child support for an entire youth team-sized roster of kids; but, the idea of different state-based income tax consequences may influence things like whether Lebron James signs with the Heat (Florida having no State income tax) versus the Knicks (New York's state income tax rate is 8.8%), or what venue hosts the Super Bowl.
The NCAA's Tax-Exempt Status: Did you know that 80 percent of what you spend on your Maryland Basketball season tickets may be deductible as a contribution to a tax-exempt organization? The NCAA receives greater than $600 million per year in tax-exempt income.
Are you a local company looking to leverage naming rights as a way to generate good will and drive traffic to your business? Call Paul Moyer, Director of Athletics at McDaniel. For twenty cents on the dollar you can put your name on an athletic venue and deduct the rest from your tax obligation.
A highly emotionally-charged debate rages on between Congress and the NCAA over the legitimacy with which the latter is able to justify its tax-exempt status; namely, insofar as and/or the extent to which the monies infused into and spent on and by the NCAA's flagship revenue-producing sports (Football and Men's Basketball) are properly allowable and/or classified as being in furtherance of the organizational and operational purposes upon which the NCAA was granted and maintains its tax-exempt status. That organizational purpose and mission was/is education-based.
On the heels of March Madness, and related to the hot-button topic of paying NCAA athletes, lobbies for both sides advance arguments, some sounding in logic, others not so much so, for and against the educational purpose of things like the NCAA Men's Basketball Tournament.
One tenet of tax-exempt status is that none of the revenues of a tax-exempt entity may inure to the benefit of any private or individual interest(s). The irony here is that it may not be the fact that certain NCAA football coaches make in excess of $4mil per year that becomes evidentiary proof that puts the NCAA at risk of losing its tax-exempt status. Rather, it may be the additional $2,000 per year in scholarship-styled stipends it is considering paying its student-athletes that may cause the NCAA to lose its (tax-exempt) status. Perhaps the irony is tempered by the rationale behind the $2,000 stipend-styled payments-The NCAA is trying to pay a pittance of pennies on the dollar to pre-empt the fallout of pending class-action litigation brought against it (by student-athletes) arguing that student-athletes have a right to share in the NCAA's financial success by being paid to play.
Maybe the real irony is in members of Congress frowning upon others' enjoyment of seemingly improper or impermissible excessive benefits; subsidized by, or funded from, public funds?
Matt Laczkowski is a former athlete, coach, and columnist writing from Westminster. Email questions to coach@with-character.com
