Democrat’s bill would strip PGA Tour of tax exemption after LIV merger

Rep. John Garamendi (D-Calif.) has introduced legislation that would strip the PGA Tour of its tax exempt status after the golfing league announced its agreement to merge with the Saudi-backed LIV Golf league. 

The bill, the “No Corporate Tax Exemption for Professional Sports Act,” would end the tax loophole that the PGA Tour and other professional sports leagues have exploited to avoid paying any federal corporate income tax. Leagues that generate more than $100 million annually in corporate income would become taxable.

In a statement, Garamendi said that Saudi Arabia “cannot be allowed to sports wash its government’s horrific human rights abuses and the 2018 murder of American-based journalist Jamal Khashoggi.”

LIV Golf, founded in 2021, is backed by the Saudi Arabia Public Investment Fund, an entity led by Saudi Crown Prince Mohammed bin Salman.

“PGA Tour Commissioner Jay Monahan should be ashamed of the blatant hypocrisy and about-face he and the rest of PGA’s leadership demonstrated by allowing the sovereign wealth fund of a foreign government with an unconscionable human rights record to take over an iconic American sports league and avoid paying a penny in federal corporate income tax,” Garamendi said in his statement. “This merger flies in the face of the PGA players who turned down hundred-million-dollar paydays from the Saudi-backed LIV to align themselves with the right side of history and human decency.”

“The notion that the Saudi Sovereign Wealth Fund would pay zero dollars in taxes on their blood money and potentially billions of dollars in profits while countless American families pay their fair share while struggling to make ends meet is ludicrous,” Garamendi concluded. “My commonsense legislation would right this wrong and bring some much-needed accountability to this matter.”

The PGA Tour announced Tuesday that it has agreed to merge with rival LIV Golf to create one larger golf organization. 

The agreement will combine both golfing tours’ commercial businesses into one for-profit yet-to-be-named entity. The DP World Tour, also known as the European PGA Tour, will also be part of the merger. 

The agreement also ends a yearlong antitrust litigation between the two golfing leagues. The PGA Tour, founded in 1929, previously suspended a list of prominent golfers such as Phil Mickelson, Brooks Koepka, and Bryson DeChambeau for their decision to jump ship to the upstart league.