Whether it be the joys of winning a conference championship or a heartbreaking snub by the selection committee, college football has once again solidified itself as one of the most intriguing and popular sports to watch in America. Twitter and message boards across the country light up year after year debating why their team should have been in the College Football Playoff. But should those fans be considered a charity cause? For the last 20 years they were, but that just changed.
In the recently passed tax reform bill, Congress eliminated a 1988 law that allowed season ticket holders to deduct the purchase of season tickets to football games, basketball games, and all other collegiate sporting events. Under the law, taxpayers were allowed to deduct “80% of payment for the right to purchase seating at a collegiate sports event.”
Congress passed the college football seating deduction in 1988 to reverse an IRS ruling that found that season tickets are a “substantial benefit” and do not qualify as a charitable contribution. At first, only contributions to the University of Texas and Louisiana State University (LSU) were eligible for the preferential tax treatment thanks to influential home state lawmakers on congressional tax law writing committees. The deductible status of seating right contributions was then extended to all universities and reduced from 100 percent to 80 percent. According to a non-profit law attorney, “[Congress] just plucked the 80% figure out of the proverbial air.” According to one analysis of 34 major programs, these subsidies cost the federal government $100 million in lost revenue annually.
Season ticket donations were not the only tax deductible component of college football transactions. Universities across the nation financed the construction or renovation of their stadiums partially through the sale of luxury boxes and preferred seating, which also fell under the 80% deduction. “Suites — usually featuring 16 seats, catered food, televisions and high-speed internet access — are priced at $50,000 to $90,000 a year,” says the WSJ.
While the bill kept many existing subsidies and deductions, the recently passed Tax Cuts and Jobs Act eliminated the stadium seats deduction. According to ESPN, several universities tried to offer boosters the option to pay for several seasons in advance to take advantage of the tax break it expired in 2018. Only Alabama or Georgia fans will be able to celebrate tonight, but we can all cheer for the elimination of the dubious college football fans as a charitable cause this year – which will save taxpayers $1.9 billion over the next decade.
