In a dramatic move long called for by critics of professional football, NFL Commissioner Roger Goodell announced Tuesday that the league was giving up the tax exempt status it has enjoyed since 1942.
All 32 NFL teams currently pay their own taxes as privately owned businesses. Goodell called the league’s exemption a “distraction” and notified all the teams in a letter that the NFL would file a return as a taxable entity in the 2015 fiscal year.
The decision comes amid renewed and increasingly vocal criticism of the NFL in the wake of a season overshadowed by domestic violence scandals. During a Senate hearing last December, New Jersey Democrat Sen. Cory Booker called out the league for its privileged tax status in the height of the controversies.
“Why does the NFL need a tax-exempt status when we could be redirecting the money to domestic violence and treatment programs?” Booker asked representatives for the league. Goodell was not present at the hearing, which drew bipartisan criticism at the time.
“I have to justify to my constituents why the NFL, this multi-billion dollar organization, has tax-exempt status,” Booker added.
Despite the change, Goodell assured teams that the move would not significantly alter the way the league functions. And according to NBC Sports, because they are no longer tax exempt, Goodell will now no longer have to disclose his financial status to the public.
The commissioner’s letter was forwarded to Rep. Paul Ryan, (R-Wisc.), and Rep. Sander Levin, (D-Mich.). Ryan chairs the House Ways and Means Committee, which overseas tax policy and Levin is the ranking Democrat.
“As you know, the effects of the tax exempt status of the league office have been mischaracterized repeatedly in recent years,” Goodell said in his letter to owners. “The fact is that the business of the NFL has never been tax exempt.”