Vern Buchanan wants to chip away at PGA Tour’s tax-exempt status

Phil Mickelson chips from a bunker. Image via AP.

Congress could soon chip away at the PGA Tour’s tax-exempt status.

U.S. Rep. Vern Buchanan said it’s time the country calls a penalty on the nonprofit status enjoyed by the sports league. The Longboat Key Republican filed a bipartisan bill with U.S. Rep. Mike Thompson, a California Democrat, that would strip the PGA Tour of its tax-exempt status.

The lawmakers want to count a stroke against the PGA Tour for its decision to merge with LIV Golf, a league largely owned by Saudi Arabia.

“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?” Buchanan said.

The legislation would impact any sports organization that earns more than $1 billion in any year over a five-year period. Golfweek recently reported that the PGA Tour earned around $1.9 billion in 2022, up significantly from $1.59 billion in 2021.

Of note, the PGA Tour-LIV merger has proven rife with political controversy. Last week, former President Donald Trump, who Buchanan endorsed for a return to the White House in 2024, announced he would welcome LIV Golf to several golf course properties he owns, including in Doral.

Meanwhile, Jeff Roe, who just left a super PAC backing Gov. Ron DeSantis’ competing bid for President, boasts ties to a PR firm that represented the PGA Tour before the merger and had rallied 9/11 families behind an anti-LIV Golf public opinion campaign. That included bringing the families to an event at the Florida Governor’s mansion earlier this year.

Buchanan, for his part, focused his criticism mostly on the fact that professional golf rakes in enormous amounts of money to still be considered a 501(c)(6) organization, a tax designation normally reserved for chambers of commerce and other business leagues.

“We should be supporting local charities on Main Street, not foreign-backed professional sports organizations that are not dedicated to benefitting the American people,” Buchanan said. “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.”

Thompson similarly questioned why the American people should pay more taxes than an international golf circuit.

“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,” the Democrat said. “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.”

The PGA Tour largely stands alone among major sports organizations in the U.S. still claiming its tax-exempt status. Major League Baseball gripped onto similar status until 2007 and the National Football League clung on until 2015. But those groups gave up the status voluntarily. The National Basketball Association, National Hockey League and Major League Soccer also do not have such status.