Professional Sports Teams Save Money with Tax Incentives
When it comes to professional sports, every city wants a piece of the pie. So cities and states giving tax breaks for big league sports teams to locate and stay within their borders is nothing new.
But with anything involving tax dollars, controversy follows. And because tax incentives for professional sports teams are so big, the controversy gets that much bigger.
Just look at Louisiana. Gov. Bobby Jindal signed into a law a measure giving NBA team the New Orleans Hornets more than $36 million in tax subsidies for the team to stay in New Orleans until 2024.
It was part of a lease agreement between the state and the team. Maybe the deal will help the Hornets recruit a couple all-stars and win a championship or two.
Even Congress is getting into the mix with a congressional committee scrutinizing tax breaks for motor sports. The NASCAR tax break allows racetrack owners to accelerate depreciation of their capital costs from 39 to seven years.
And it may not be the big leagues, but the state of Iowa recently passed a tax break as high as $16.5 million for a youth sports complex.
A tax break alone may not raise eyebrows, but the location for this youth sports center is where the Kevin Costner movie “Field of Dreams” took place. With a total price tag of $38 million, the 24-field site would receive rebates on collected sales tax for up to 10 years, giving the site a possible reprieve from owing back taxes.
When governments dole out tax breaks to one person or organization, another one ends up paying to fill the gap. That can lead tax officials to more aggressively pursue those who owe back tax debt.
But by working with a tax professional, you can spend more time at a sports game instead of challenging a back tax debt at a tax hearing.
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