The problem for the wealth fund and tour is that Washington also has a bipartisan affection for legislators who impersonate sports executives and poke fun at real executives, both in public and in private. It may be good policy to be angry with the commissioners who are more mocked than many elected officials, and Congressional hostility making headlines may complicate the golf industry’s quest to sell the deal to the public – and there then pass.
The tour and endowment fund can take some comfort in history, suggesting that a successful attempt by Congress to thwart the deal directly is unlikely. However, The Hill could still try to make the trade painful after a spirited public hearing or two. A change to the tour’s tax status, as envisioned in the bill introduced in the House, could cost it millions of dollars a year because it is structured as a “business league” exempt from taxes under Section 501 (c)(6) of the Internal Revenue Code.
Groups like the PGA Tour have fought legal issues related to their tax-exempt status in the past, with one last-minute attempt to end the practice for sports leagues disappearing from a 2017 tax bill at the last minute. In the past 18 months, years after the NFL and Major League Baseball relinquished their exempt status, public records show the tour has spent at least $640,000 on lobbying, much of that work related to “tax laws that affect on exempted organizations”.
As part of his investigation, Blumenthal on Monday demanded documents related to the tour’s tax-exempt status and, in his letter to the tour, questioned whether the deal would allow a foreign government to “benefit indirectly from provisions in U.S. tax laws which are intended to promote non-profit business associations.”
Oregon Democrat Senator Ron Wyden, who chairs the Senate Finance Committee, was similarly outraged that the tour had “moved itself to the top of the leaderboard in terms of the most questionable tax exemptions in professional sports.”
But Wyden has also suggested the deal should meet resistance from the Committee on Foreign Investment in the United States, a committee led by the Treasury Department that examines the national security implications of foreign investment in real estate and U.S. businesses. .
Whether there are serious national security concerns about a golf tour deal, or whether the commission will review the agreement at all, is unclear. Janet Yellen, the Treasury Secretary, said last week that it was “not immediately clear” to her that the deal concerned national security. But Wyden, who is planning a congressional investigation of his own, has expressed interest in the department’s investigation into whether the deal could “give the Saudi regime improper control or access to U.S. real estate,” most likely through the Tournament Players Club collection of the tour. golf courses.