HR578-118

2. Findings Congress makes the following findings: The 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. League-wide operations of the NHL, PGA Tour, and LPGA together generate over $1,000,000,000 in annual revenue, and these businesses are unmistakably organized for profit and to promote their brands. 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. 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.

4. Special rules relating to professional sports leagues Section 501 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection: No organization or entity shall be treated as described in subsection (c)(6) if such organization or entity— 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 has annual gross receipts in excess of $10,000,000. The amendment made by this section shall apply to taxable years beginning after December 31, 2022. (s)Special rules relating to professional sports leaguesNo 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..