Press reports about winners and losers in the new tax bill passed last night:
• Tax Bill Worth Millions to Pro Teams Is Approved (New York Times):
A lot of pro sports owners woke up richer today, at least on paper. A number of investment bankers and accountants say many professional sports franchises will gain tens of millions of dollars in value because of approval yesterday by the United States Senate of a sprawling tax bill focused on multinational corporations and farmers.
The change to an obscure tax rule affecting pro sports owners was contained in a single sentence in the 633-page bill, which was approved last week by the House of Representatives. The measure allows owners to write off the full value of their franchises over 15 years; under current tax law, they can write off only the value of players’ contracts over three to five years.
The change might give a $2 billion windfall to pro sports owners, as bankers estimated it would add about 5 percent to the value of professional franchises, which was estimated at $41 billion over all by Forbes magazine in 2002. The actual effect will vary from team to team.
• Payback on K Street (The Washington Post):
The corporate tax bill that Congress has sent to the White House rewards just about every special interest that retains a lobbyist in Washington….The Motion Picture Association of America, Hollywood’s trade group, had been hoping for $350 million a year in subsidies, which were written into the Senate version of the bill as partial compensation for the loss of a bigger export subsidy that the bill repeals. But the Senate’s largesse was cut back to around $100 million in the final bill that emerged from the House-Senate conference, leaving the movie industry as the biggest net loser from the legislation. ( [For prior TaxProf Blog coverage, see here.]
2 responses to “Winners and Losers in Tax Bill”
Winners & Losers in Monday’s Tax Bill
Taxprof parses the winners (professional sports team owners) and losers (hollywood, to some degree). I’m still mystified as to our Senators votes: Feingold: Yes and Kohl “Present”….
The “winners” in professional sports is vastly overstated. All the bill did was apply Section 197 to the purchase of sports franchises. So now they can amortize all of the goodwill and other purchased intangibles over 15 years — just like every other business. They also gave up on capitalizing and amortizing player contracts under Section 1056. For most baseball teams, that was a 5 year write off of up to 50% of the purchase price.