GOP tax bill's 21% excise tax on non-profits will cost colleges millions
"Major-college athletics programs are facing significant increases in the cost of already highly paid coaches and administrators due to a tax that will be imposed on the compensation of all non-profit organizations’ most highly paid employees. For example, as currently constructed, Alabama’s contract with football coach Nick Saban likely will cost the university at least $1.2 million in addition to the $7.125 million in basic compensation he is scheduled to be paid if remains the Crimson Tide’s coach throughout the 2018 calendar year."
Like other non-profit organizations, colleges will be responsible for paying a 21% excise tax on annual compensation above $1 million that goes to any of the organization’s five most highly compensated employees. The tax is set to take effect on compensation earned, beginning Jan. 1. It also will be applied to certain types of what the legislation calls “parachute payments,” or separation payments like a buyout. At many FBS schools, coaches and/or the athletic director are among the institution’s five highest-paid employees and making more than $1 million.
"That’s not tax reform – that’s trying to discourage seven-figure payments to college sports figures and pick up a little revenue,” said Duke law professor Richard Schmalbeck, who has been a longstanding critic of the deduction for college-sports donations that provide seat-purchase privileges.
https://www.usatoday.com/story/sports/ncaaf/2017/12/20/college-sports-impact-new-tax-bill-millions/968741001/
Imagine the looks on the faces of the high ranking officials at all of these major colleges and universities in red states (Alabama, Georgia, Texas, Florida, Tennessee, Louisiana, etc) as they find out about this enormous tax. So many organizations and individuals are in for a rude awakening once they realize the full consequences of this disastrous legislation.