• WisBusiness

College athletics programs worried about new tax law
1/4/2018

Some college athletics programs in the state are worried about negative impacts from the new federal tax law.

Two provisions affect big state athletic programs: one eliminates the deduction for certain fan donations related to preferred and premium seating; the other taxes seven-figure salaries.

The first deduction let donors to major college sports teams get a tax benefit from making large contributions, which also gave them preferential status for securing tickets.

Marquette University had no position on the tax legislation as a whole, according to Brian Dorrington, Marquette senior director of university communications. But this specific provision could mean trouble for the school's athletic program, he says.

"With the bill now signed into law, we -- like other college athletic departments with premier programs -- are concerned about what impact eliminating the deduction for money that goes to student-athlete scholarships might have," he said.

But the specific impact can't be quantified, he said, because the deduction benefit is an individual consideration.

"We simply do not know for how many of our valued season ticket holders the deduction has been important or to what extent," he noted. "Marquette Athletics has a proud and loyal fan base, and we're hopeful their generosity will only increase for decades to come."

Jason Doherty, senior associate athletic director at UW, says "we really don't know how the new tax law will affect our preferred and premium seating donations."

In 2016, the UW athletic department received about $19.3 million in preferred and premium seating-related donations, Doherty said. Of that number, about $9 million was given in preferred seating donations for football, men's basketball and men's hockey, and the other $10.3 million went to premium seating like suites and club seat memberships for football, men's basketball and men's hockey.

"It might be some time before taxpayers realize and understand the impact of the tax law changes," Doherty added.

Meanwhile, another part of the tax bill will result in higher costs for Wisconsin Athletics because of a provision related to employee compensation. He says the organization will have to pay a 21 percent tax on some salaries over $1 million, which would apply to three employees: Barry Alvarez, Paul Chryst and Greg Gard.

"We are anticipating paying about $800K in new taxes due to this tax law change," Doherty said.

See more on how the tax bill could affect business in the state: http://www.wisbusiness.com/index.Iml?Article=389726>
http://www.wisbusiness.com/index.Iml?Article=389751

--By Alex Moe
WisBusiness.com

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