LSU Athletics officials are concerned the proposed House GOP tax reform bill, H.R. 1 Tax Cuts and Jobs Act, could have negative effects on college athletic programs throughout the country, as the elimination of a little-known tax deduction could cause programs to lose millions of dollars in revenue.
The Tiger Athletic Foundation awards priority points for donations made to TAF and the other affiliate organizations, the LSU Foundation and the LSU Alumni Association, to allocate certain tickets and parking passes. Fans donate thousands of dollars each year to earn points and qualify for season tickets, according to TAF.
To purchase season tickets to athletic events or purchase a parking pass, fans must donate to TAF. Tickets to the suite and club level tickets require more points than a general season ticket. The system is also used to allocate tickets for away games, post-season games and bowl games.
The system is popular with other universities because the donations come with a major tax benefit. Under section 26 of the Internal Revenue Code, charitable donations, contributions and gifts can be tax deductible. Fans who make donations to TAF, LSU Foundation and the LSU Alumni Association can claim up to 80 percent of their donations as a deduction on their taxes.
In a statement to The Daily Reveille, LSU Athletics said while the department does not have a formal position on the H.R. 1 — the House GOP tax reform bill — they are doing their best to make people aware of the provision, as it could have harsh implications for college athletic programs nationwide.
The department cannot predict how the removal of the tax deduction will impact the program, LSU Atheltics said, but even a conservative estimation would have LSU Athletics losing between $3 million and $12 million.
“LSU does not currently have a revenue source, and/or immediate cuts that could account for that loss in such a short period of time,” LSU Athletics said. “Section 1306, which removes the 80 [percent] tax deduction for donations to college athletics tied to ticket purchases, provides tens of millions of dollars in private funding for LSU Athletics and others across the country.”
The University’s athletic program is a fully self-sufficient program, meaning they do not use any taxpayer dollars or student fees, LSU Athletics said. Over the last five years, the program has donated over $50 million to the University’s academic programs. LSU Athletics said the revenue from donations is a major reason why the program is able to remain self-sufficient.
“We know our members of congress, and in particular the Louisiana congressional delegation, are working hard toward tax reform for Louisiana and the nation,” LSU Athletics said. “We are pleased to be a part of that process by alerting them to potential ramifications of this provision.”
Season ticket holder Rusty Welch said he does not use this particular tax deduction as he donates to TAF through his business, and the other season ticket holders he knows do the same thing.
“I was buying season tickets prior to the points system,” Welch said. “I think you’re still going to have people buying season tickets through the donation program.”
