Super Bowl Tax Exemption
Yesterday Governor Deal signed the legislation that gives the NFL tax exempt ticket sales on a potential Super Bowl in Atlanta in 2019 or 2020. Miami, Taampa and New Orleans are also in the running.
As expected, legislators and others opposing the measure decried the action as a tax giveaway and/or corporate welfare. According to an Associated Press report:
The state is expected to forgo $10 million in sales taxes on game tickets. The law gives the same exemption on tickets to other sporting events expected to generate at least $50 million in other revenue.
Which begs two questions:
- If the tax exemption is an NFL requirement of awarding the Super Bowl how can the state “forego” something they would not have unless there is an exemption?
- Additionally who wouldn’t invest $1 to earn $5?
Not being a legislator or a financial expect I must have missed something here. So realizing that our readers are smarter than this writer can someone enlighten me?
About Author
IrishPat
Patrick Malone is a Business Advisor and Leadership Mentor headquartered in Blairsville, Georgia. He co-hosts Mountain Daybreak and Mountain Mornings, weekday news programs, and hosts This Week in Blairsville a weekend program on WJUL/WJRB. He is a mentor in Union County High School, serves on his church council and writes a monthly column on leadership in the animal healthcare industry.
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3. Why does the NFL see the need for this exemption ?
Because every other city in the running already has this exemption in place.
Question 1 answered itself as to question 2 we now do not have a choice.
The NFL told Atlanta if you want a Superbowl you will have to build a dome stadium. We did and 2 superbowls were played (1 during an ice storm). NOW according to Roger Goodell “Football was meant to be played in the outdoors” and if you want another Superbowl you will need to build a 900 Million, no a 1.2 Billion, no now a 1.4 Billion retractable roof stadium. On the other hand New Orleans Superdome has hosted 10 superbowls AND they are in the running for another Superbowl with the “new” Atlanta stadium. They have a dome and not an outdoor stadium so why are they still in the running? Face it the NFL does not like Georgia or Atlanta.
Atlanta was suckered into building a new 1.4 billion football stadium by the NFL with NO guaranties of any Superbowls at all. Now Atlanta is in a weak position to resist any demand the NFL wants to make and I’m sure they will have more demands. Way to go guys.
Yes and no. The other reason for building the stadium was because Blank wanted an MLS team and he wasn’t going to get one without a new stadium.
Extortion by sports teams and the rollover of governing bodies are why we need more women in charge. They wouldn’t give a damn about sports and would put public money into public uses-cultural events, parks, community sport facilities.
In any case, football will be as dead in 20 years as boxing is now. What mother is going to send her baby off to practice knowing he risks concussion, brain damage, and an early death.
Women actually do “give a damn about sports”. I already have my tickets for the Atlanta/Green Bay game.
“What mother is going to send her baby off to practice knowing he risks concussion, brain damage, and an early death.” Soccer moms. Hockey moms. Gymnastics moms. Wrestling moms. Lacrosse Moms. Baseball moms. Etc…
“In any case, football will be as dead in 20 years as boxing is now.” You are crazy. Boxing hasn’t diminished in popularity because of the risks. It has given way to MMA because it wasn’t violent enough. Football isn’t going anywhere.
I’m going to agree with Ellynn on this.
Boxing (or MMA) isn’t like football, or soccer, or band. It’s not a school sponsored sport except maybe in rare occasions. Mothers don’t generally don’t send their kids to boxing or MMA I think, and even if they did it would be the equivalent of flag football, right? They don’t let little kids beat each other unconscious do they?
Schools are the training ground for football and the liability is just going to be too great for schools to continue to sponsor in it’s current form.
I remember wrestling practice in middle and high school. That was a school sponsored sport and it definitely was not equivalent to flag football. I started wrestling in middle school, but there are kids that start as young as elementary school. I have to say I’m not really a fan of starting them out that early and probably wouldn’t let my son do that until he was middle school age.
My brother was in the Saturday morning training league for wrestling as 8. He was in full organized competitions at 9, the junior high team at 11 and played until he was 18. Never played football, but still had a concussion, a dislocated shoulder, and a hernia all before the age of 14. And yet, my school still has one of the best wrestling programs in the state and I doubt they are going to stop the program any time soon.
The wrestling, hockey, and girls gymnastic departments while I was in school (way way back) had higher rates of head and neck injuries then football. My high school had a hockey player DIE on the rink in a game in 1988/89 when he took a puck to the chest right below the breast pads. My best friend’s boys had concussions as 8 year olds playing soccer – one from a fall into the goal post as the goalie, one from a head on collusion while two players were trying to head bunt the ball. My cousin was knock out cold in a girls volley ball game in a state semi finale match. Just last week two MLB players collided in the outfield and left the game with concussions.
All player’s mothers who sends a child off to play a sport where they can get hurt. Even a band mom (marching band is really a contact sport…). If you want to lower your child’s odds of being hurt, be a chess mom.
I broke a collar bone in soccer practice and my tailbone during a game my junior year. It’s not fun walking around high school with an inflatable donut that you have to sit on.
(I think I meant to say I was agreeing with CoastalCat before.)
I’ve been hurt in sports too, it happens, but in football today by the time they reach college, they are basically removing an injured player almost every PLAY. I remember looking at the NCAA injury list at one point last year, and there were hundreds of names on it with season ending injuries, many of them head and neck. A lot of those players will have 3 or 4 knee surgeries before they use up their eligibility. It’s just unsustainable. And let’s face it, football is different now than it used to be. Players are bigger, stronger, and faster. They keep having to add new rules because the protective equipment is not keeping up with the rest of the game.
Sure there is the occasional concussion in wrestling, but that is not what we are talking about in football, where virtually every play for some players involves pretty violent head contact.
Maybe OSHA should start getting involved in sports. Teams could start posting signs in the stadium that say “It has been [14 minutes] since the last injury.”
Answer to #1: Other host cities have paid the sales tax in the form of a rebate to the state. The cities, after all, are getting the biggest benefit from the economic boon. When the state foregoes the sales tax, technically you have people in places like Vidalia giving up a portion of their tax money (albeit a very tiny bit) for the benefit of people in Atlanta.
The rest of the state is giving up nothing.
If there’s no exemption, there’s no SuperBowl, and there’s no taxes to send to the state coffers. If there is a SuperBowl, the taxes on the tickets are exempted, there is still sales tax on merchandise and food inside the stadium, and on all of the sales generated from out of towners that is estimated to be about $15 Million in sales tax alone. That’s before you look at the statewide hotel fee of $5 per night for transportation on what would otherwise be mostly empty rooms on a Feb weekend, rental car taxes, other hotel taxes, etc.
The state coffers, and thus all Georgia taxpayers, are unambiguously better off under this deal. The “other Georgia” isn’t losing anything for Atlanta’s benefit here.
If the city of Atlanta paid the state a rebate for the sales tax money on ticket sales, then the Super Bowl would still come. The financial burden would shift to Atlanta, not the state. Regardless of whether or not this is a good deal for Georgia, it is a way the state can get the sales tax money on tickets and Atlanta can still get its Super Bowl. I was just answering the question and, at the same time, doing a little devil’s advocate work on the rationale behind that other option.
With a name like superbowlzero you’re a devil’s advocate? I would hate to see what your name would be if you were truly against the idea completely. Just saying…
Yeah…probably should have re-thunk that name. I am, actually, for the sales tax exemption and for an Atlanta Super Bowl, for all the reasons discussed here. At the same time, making Atlanta pick up the tab does make some sense to me. And I am an Atlanta resident, so I’m not pushing the bill onto someone else.
What burden? BTW if I were the Mayor of Atlanta I would do that in a heartbeat provided the rest of Georgia would forego their share of the $50 million in additional tax revenue.
Let me start off by saying that I support the tax break, because, as Charlie has said, the stadium is going to be built no matter what, and this is required by the NFL to get a Super Bowl. In fact, I hope we give them this tax break many more times in exchange for many more Super Bowls over the life of the new stadium. After all, we’re stuck with that hideous monstrosity for at least 20 more years.
But it IS nonetheless an odd demand by the NFL. Super Bowl ticket demand is almost completely inelastic. Ticket prices are absurdly high and no one that can afford those tickets is going to balk at an 8% sales tax. They just aren’t.
The truth is that the NFL could ask for far more extensive tax breaks, and cities and states would still fall all over each other to get a Super Bowl. Perhaps we should be thankful they’re taking us out to dinner first.
I know few people that have gone to any personal expense to attend a Super Bowl, much less paid face value for a ticket, my attendances were entertainment deductions by sponsors.
Charlie’s support of a tax break because everyone else does it is a tribute to those that don’t need it…the NFL, by a public that would just waste those taxes, right ?
The NFL should be bigger than taking this particular tribute from the general public just because they can. Or can we double down (give them $2 to make $5) and get all the Super Bowls ?
Asking a capitalist organization to be “more” than trying to get the best deal? Hah! You sound like a Bernie supporter!
It’s only in recent times that the NFL has considered themselves capitalists. Until about a year ago the NFL was considered to be a nonprofit (cough, cough). I can only assume that is from whence sprang this no sales tax thing in the first place.
If Congress cannot get anything else done on tax code I would love to see severe restrictions placed on the definition of “nonprofits”. Especially “social welfare” organizations like PACs, SuperPACs,
Christian CoalitionFaith & Freedom Coalition, etc.What about restrictions on unions as well? Let’s make the rules apply to everyone.
Hoo boy. This is a big can of worms. What kind of restrictions on unions are you talking about?
I don’t know. The same restrictions that Will Durant wants to put on PACs and organizations like the Faith and Freedom Coalition. I’m assuming he wants to go after how they raise money or how they spend money on candidates. The same should apply to unions. That is all.
I’d love to see a breakdown of where this $50M in “other revenue” to the state comes from. Assuming a 4% sales tax rate, that assumes that there will be $1.25 billion in spending in the state as a result of the Super Bowl. I’m not saying it’s impossible, but it seems high. The $10M “investment” also doesn’t take into account the costs for security and other costs that the city and state will have to incur.
Much of the logic behind the numbers is laid out here:
https://www.georgiapol.com/2016/02/08/spite-is-behind-motivation-to-block-super-bowl/
The estimate of sales tax revenue to be gained that most are using is $30 Million, of which roughly half would be state money and roughly half would be divided between City of Atlanta (1% for water), MARTA, and local counties. (I say roughly half because not all spending would be in the COA, but splitting it evenly to make the numbers easier). The $10 Million waived as a concession like the other cities already do that are bidding is also split where only half would be state money.
The $30 Million is only the sales tax revenue. It doesn’t include hotel tax, rental car tax, income taxes, or any other taxes/fees that are generated with increased traffic. And much of this spending is truly additional – we’re talking about a weekend that is usually one of the slowest ones for the Atlanta Convention & Visitors Bureau. What would normally be empty hotel rooms would instead enjoy 3-5 days of some of their highest available rates.
As for the costs, sure there are also some additional ones. Most will be borne by the City and County. But note that with the numbers I’m dealing with above we’re only talking about direct, first round taxation. The Dallas SuperBowl that became an ice event still produced about a $250M “economic benefit” to the metro area/State. The last Super Bowl in Arizona (no ice there) generated about $700M. Those numbers are hard to predict and often become questionable with advance studies, but figure Atlanta would be somewhere in the middle. A $500M shot in the arm to Atlanta and the state a week or so after credit card bills from Christmas are due isn’t exactly a sharp stick in the eye.