A Baton Rouge lawyer who successfully lobbied Congress in 1986 to create a tax deduction for people who donate money to colleges and universities for seats at sporting events—which President Barack Obama wants to eliminate under his new budget proposal—tells Bloomberg eliminating the deduction would hinder colleges and universities such as LSU in fundraising efforts.
“It’s one of the best things to come down the pike,” Theodore L. Jones, 80, says of the tax deduction.
“I wouldn’t want to take on all the college presidents and college sports programs around the country, but I’m not the president,” says Jones, who holds season tickets at Tiger Stadium and personally benefits from the tax deduction, of the president’s budget plan.
Currently, college sports fans can deduct as much as 80% of the cost of such donations in exchange for tickets. Obama’s budget proposal sent to Congress on Monday would end the deductions.
By closing what the White House calls a loophole in the system, people would pay about $2.5 billion over the next decade in higher taxes. The budget plan also would end the use of tax-exempt bonds to build professional sports facilities. Debt to finance stadiums and arenas would be taxable if more than 10% of the location is used for private-business use.
Repealing such financing would save $542 million from 2016 through 2025, according to the proposal.
Some U.S. colleges use the tax benefit to generate more revenue from sports. They set a price for season tickets and then demand donations in the hundreds or thousands of dollars on top of that cost as a condition of the sale. Part of the pitch is that fans can claim the expense as a charitable deduction when they itemize their tax returns.
