Sen. Ron Wyden, left, is difficult the tax-exemption standing of the PGA Tour, which is run by Jay Monahan (proper).
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Like a golfer taking part in an aggressive line, a distinguished lawmaker has taken lifeless purpose.
His goal: the PGA Tour’s tax-exempt standing.
Last week, Sen. Ron Wyden (D-Ore.) launched laws that might strip the Tour of the safety it enjoys as a 501(c)6 group, a designation that gives tax exemptions to commerce organizations {and professional} sports activities leagues, amongst different entities.
The bill, offered as “The Sports League League Tax-Exempt Status Limitation Act,” would modify the 501(c)6 standards to exclude sports activities organizations with belongings exceeding $500 million. Namely, a sure operation based mostly in Ponte Vedra.
If handed into regulation, Wyden’s proposal would have profound monetary implications for the Tour. (According to a 2019 Congressional account, the Tour’s nonprofit standing allowed it to skirt $80 million in federal taxes between 2016-2019 alone.)
If being the operative phrase.
What are the chances of that actually occurring?
Just as golf pictures can flip in any variety of instructions, so can laws. And it’s usually arduous to know the place a bill is headed, particularly within the early goings, mentioned Mark Anderson, a golf skilled, former Congressional management staffer and founding father of TAG Consulting Group, a Virginia-based lobbying agency.
“I can tell you this,” Anderson mentioned. “I wouldn’t expect any immediate action.”
For starters, he famous, lawmakers don’t work a wraparound season. Congress is on the cusp of its August recess, “which means that for the next six to eight weeks, (the bill) will sit out there as a subject for discussion, and people will have an opportunity to talk about it,” Anderson mentioned. But not a lot else.
What will transpire after lawmakers reconvene is more durable to foretell. But this a lot is for certain, Anderson mentioned: Interested events, the PGA Tour included, will do their greatest to get a gauge of how severe Wyden is in regards to the bill. Given Wyden’s position because the chairman of the Senate finance committee, his identify lends the laws inherent weight, Anderson mentioned.
But lawmakers float payments with all types of motivations, Anderson mentioned. Sometimes, they introduce what are often known as “messaging” payments, meant to sign leanings on broader points, or as trial balloons, aimed toward testing the political local weather.
“If I’m the PGA Tour, I’d be reaching out to Wyden’s office to have a conversation,” Anderson mentioned. “I’d want to know, ‘How carefully have you looked at all of this? Do you understand the potential ramifications if you go too far?’”
This isn’t the primary time the Tour’s tax-exempt standing has come up for dialogue in Washington.
In 2018, as an example, Sen. Joni Ernst (R-Iowa) launched what was often known as the PRO Sports Act (Properly Reducing Overexemptions for Sports Act), which aimed to revoke the nonprofit standing for the league workplaces {of professional} sports activities organizations, singling out in its language the PGA Tour, the LPGA Tour and the National Hockey League. That bill didn’t cross.
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Wyden’s bill comes at a extra tumultuous time in skilled golf, in opposition to the backdrop of a proposed partnership between the PGA Tour and Saudi Arabia’s Public Investment Fund (PIF). In introducing the bill, Wyden made plain his distaste for that controversial deal-in-the-making, saying that any “organization that betrays its own word and agrees to become a profit generator for Saudi Arabia’s brutal regime has disqualified itself for a tax exemption.”
The Tour-Saudi partnership is, in fact, removed from finalized. It might nonetheless come aside, or get squashed by federal regulators, all of which provides different variables into the combo.
In discussing the partnership, the Tour has mentioned that it plans to retain its nonprofit standing shifting ahead. But if Wyden’s bill good points momentum, Anderson mentioned, it might immediate the Tour to voluntarily relinquish its tax exemption, as different massive sports activities leagues, together with the NFL, have executed.
“Give up your status, and Congress may go away,” Anderson mentioned.
Meantime, the messy work of sausage-making will proceed. Passing laws is a fancy and laborious course of, requiring approval from each the Senate and the House of Representatives earlier than getting log out (or not) from the President.
What may come of Wyden’s bill?
One indication of its prospects will the depth of dialog it evokes when Congress reconvenes, mentioned Garrett Watson, senior coverage analyst for the Tax Foundation, an impartial nonprofit that examines federal, state and international tax insurance policies.
“Does it gain cosponsors? Do they hold hearings and have broader discussions? Those are the some of things I’d be watching,” Watson mentioned.
Another is whether or not the bill good points bipartisan assist, an usually elusive function when it involves tax laws, which, Watson mentioned, tends to have “a strong party valence.”
Whatever occurs, the bill stands little probability of continuing to the Senate flooring by itself. For it to maneuver ahead, Watson mentioned, it must be hitched to a bigger legislative car, embedded in a broader finances deal or tax bundle.
When and the way which may happen is one other matter. As with a lot else in golf — and politics— as of late, it’s TBD.
“If I had to personally bet, I would be surprised if [the bill] ended up riding on something and passing this year,” Watson mentioned. “But tis’ not out of the realm of possibility.”
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